A Case Study on the Recovery Criteria of Reliance Damage in Marine Transport Contract and Charterparty

Abstract

Contracts bind the parties of a contract to the terms of the agreement. When one party breaches the contract, the other party can suffer losses and claim damages, to be recovered from the breaching person. To measure the damage, three measures are used: expectation damage, reliance damage (wasted expenditure), and restitution. In this study, we have attempted to verify the concept of measure of damage and the recovery criteria of reliance damage, based on three cases. Furthermore, this paper discusses the direction of court judgments regarding the criteria measuring reliance damage through case analysis. The two recent cases of CJ Logistics and Fulton showed that the court considers causation and mitigation as criteria for wasted expenditure (reliance damage) under British law. Further case research regarding causation and mitigation under the marine transport contract and charterparty is needed to establish the trend in court judgments and then to provide countermeasures to the parties.

Keywords

• Reliance Damage
• Wasted Expenditure
• Expectation Damage
• Mitigation
• Causation