Module 3

Limits on damages: remoteness, certainty, mitigation, fault, penalties and caps

The compensation principle says that the claimant should be restored to the position they would have been in. If that were the whole story, damages would be limited only by the size of the loss. But the law does not allow a claimant to recover every loss that can be traced to the wrong. Losses that were unforeseeable, too speculative to prove, easily avoided or partly the claimant’s own fault are cut down or excluded. Contracts themselves may fix the damages in advance or limit them, and statutes cap some awards. These limits are where most real damages arguments are won and lost: the claimant’s lawyer tries to show that the loss was foreseeable, proved and unavoidable, and the defendant’s lawyer tries to show the opposite. This module sets out the main limits, with invented examples and figures, and shows how to apply each one to a claim. The doctrines are described in general common-law terms. They are broadly similar across common-law systems and have parallels in civil-law systems, but the details, especially on penalties and on caps, differ and change.

General education on civil remedies, using invented cases, businesses and people. It states common principles in simplified form and does not describe any one country's law, which differs and changes; rules on damages, punitive damages, costs, limitation periods and enforcement in particular vary. It is not legal advice, and it does not replace the instruction of a law school or advice from a qualified lawyer.