P agrees to purchase Ds house. Then Ds wife registered a title that was binding on subsequent purchasers. P sued for specific performance and damages. Value of house rose drastically between time of agreement and trial
What is the proper time to measure damages when breach of a contract occurs?
If damages are awarded in substitution for specific performance, the court should award such damages as will put the plaintiff into as good as position as if the contract had been performed, even if to do so means awarding damages assessed by reference to a period subsequent to the date of breach.
Contemplation of parties in Hadley v Baxendale only applies to type or head of damages contemplated by parties – it does not affect the quantum of damages under a specific type or head of damages (if parties contemplated the type of damage, it does not matter if they did not think the amount of damages would be so high – the breaching party is still liable)
The damages should constitute a true substitute for specific performance – giving as nearly as may be what specific performance would have given. = Legal Basis Lord Cairns Act
General rule: Normal time to measure damages is when the contract is breached (difference between contract price (value if would have been performed) and market price at date of breach – normally fixed date for completion)
**This case opened up normal rule – can get date of hearing when getting damages when specific performance is claimed in this case