# Remedies for breach of contract: damages and termination

> **Key takeaway:** Damages: expectation (Robinson v Harman); remoteness (Hadley); mitigate. Termination: repudiation / condition / serious innominate breach. LDs vs penalty: Cavendish legitimate interest test. SP/injunction exceptional. CRA consumer remedies may add options.

- **Jurisdiction:** England & Wales
- **Practice area:** Commercial
- **Last reviewed:** 2026-08-04
- **Interactive page:** https://kttclegal.info/library/notes/Commercial/remedies-for-breach-of-contract
- **Keywords:** damages, breach of contract, remedies, Hadley v Baxendale, termination, liquidated damages, penalty, Cavendish, expectation interest

## What is this about?

When a contract is broken, the primary common-law remedy is damages aimed at protecting the expectation interest. Termination (discharge for breach) is available for repudiation or breach of condition / serious innominate-term breach. Equitable remedies (specific performance, injunction) are discretionary and exceptional for personal service and continuous supervision cases.

## What is the core rule?

Compensatory damages put the claimant, so far as money can, in the position as if the contract had been performed (Robinson v Harman), subject to remoteness (Hadley v Baxendale two limbs; modern restatements), causation, mitigation, and rules against double recovery. A party may terminate for renunciation, incapacitation, or a terminating breach; after termination, both parties are discharged from future primary obligations while damages for past and future loss remain claimable. Agreed damages clauses are enforceable if genuine liquidated damages, not penalties (Cavendish Square / ParkingEye).

## What are the elements or test?

1. Identify the breach and whether termination rights arise (condition, repudiation, or Hong Kong Fir serious breach)
2. Choose measure: expectation (ordinary), reliance (as alternative in some cases), or exceptionally account of profits (Attorney General v Blake — rare)
3. Apply remoteness: losses within reasonable contemplation at contracting (Hadley limbs)
4. Mitigation: did the claimant act reasonably to keep loss down?
5. Liquidated damages vs penalty: legitimate interest and proportionality (Cavendish)
6. Consider specific performance/injunction only where damages are inadequate

## Which authorities matter?

- **Robinson v Harman (1848) 1 Ex 850** — Classic statement of the expectation measure of contractual damages.
- **Hadley v Baxendale (1854) 9 Ex 341** — Two-limb remoteness test for contractual damages; still the starting framework.
- **Photo Production Ltd v Securicor Transport Ltd [1980] AC 827** — Termination and damages analysis after serious breach; rejects automatic nullification of exemption clauses by fundamental breach doctrine.
- **Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, [2016] AC 1172** — Supreme Court reformulates the penalty rule: whether the clause is out of all proportion to a legitimate interest in performance.

## How does this apply in practice?

Contributory negligence is not generally a defence to pure contractual claims in the same way as tort (though concurrent duty cases need care). Debt claims for liquidated sums due are distinct from unliquidated damages. Consumer remedies under CRA 2015 (repair, replacement, price reduction) sit alongside common-law rights in consumer cases.

## What are common pitfalls?

- Claiming losses that fail Hadley remoteness without special knowledge evidence
- Treating every breach as entitling termination
- Labelling all agreed payment clauses as unenforceable penalties after Cavendish without the legitimate-interest analysis
- Failing to plead and prove mitigation or credit for benefits received

## When would a practitioner use this?

Core note for drafting breach claims, advising on termination risk, and reviewing LDs/penalty exposure in commercial contracts.

## Quick reference

Damages: expectation (Robinson v Harman); remoteness (Hadley); mitigate. Termination: repudiation / condition / serious innominate breach. LDs vs penalty: Cavendish legitimate interest test. SP/injunction exceptional. CRA consumer remedies may add options.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*