Damages
Special damages

Special damages compensate the claimant for the quantifiable monetary losses he has suffered. For example, extra costs, repair or replacement of damaged property, lost earnings (both historically and in the future), loss of irreplaceable items, additional domestic costs, and so on. They are seen in both personal and commercial actions.

Special damages can include direct losses (such as amounts the claimant had to spend to try to mitigate damages) and consequential or economic losses resulting from lost profits in a business.

Damages in tort are awarded generally to place the claimant in the position in which he would have been had the tort not taken place. Damages for breach of contract are generally awarded to place the claimant in the position in which he would have been had the contract not been breached. This can often result in a different measure of damages. In cases where it is possible to frame a claim in either contract or tort, it is necessary to be aware of what gives the best outcome. If the transaction was a "good bargain", contract generally gives a better result for the claimant.

As an example, Neal agrees to sell Mary an antique Rolex watch for £100. In fact the watch is a fake and worth only £50. If it had been a genuine antique Rolex, it would have been worth £500. Neal is in breach of contract and could be sued. In contract, Mary is entitled to an item worth £500, but she has only one worth £50. Her damages are £450. Neal also induced Mary to enter into the contract through a misrepresentation (a tort). If Mary sues in tort, she is entitled to damages that put her back to the same financial position place she would have been in had the misrepresentation not been made. She would clearly not have entered into the contract knowing the watch was fake and is entitled to her £100 back. Thus her damages in tort are £100. (However, she would have to return the watch, or else her damages would be £50.)

If the transaction were a "bad bargain", tort gives a better result for the claimant. If in the above example, Mary had overpaid, paying £750 for the watch, her damages in the contract would still be £450 (giving her the item she contracted to buy), however, in tort damages are £700. This is because damages in tort put her in the position she would have been in had the tort not taken place, and are calculated as her money back (£750) less the value of what she actually got (£50).
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