The House of Lords was recently asked to consider whether, when assessing damages for breach of contract, the courts should take account of events that occurred after the breach. In Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007], the majority of law lords determined that the overriding principle in the assessment of damages is compensation for actual loss. If an event post-breach affects that loss, the court should take this into account to avoid unjust enrichment.
The pertinent facts are simple. Golden Strait contracted with Nippon for the use of Golden Strait’s ship for seven years. The contract gave either party the right to terminate the contract if war broke out between, among others, the US, the UK and Iraq.
