The Assessment of Gain-Based Damages for Breach of Contract

This article argues that there are two different measures of gain-based damages for breach of contract: the Wrotham Park measure and the Blake measure. The former is assessed by reference to the objective value of the benefit received by the defendant and the latter by reference to the defendant's subjective gain. In assessing Wrotham Park damages the courts apply a fixed formula, determining the price that a reasonable person in the position of the claimant might have demanded from the defendant at the time of breach for relaxing its rights under the contract. The Blake measure is different; it requires the defendant to disgorge the actual net profit received from the breach. Unlike the Wrotham Park measure, it deals only with positive and not negative gains. It is also limited by the doctrine of causation so that only those gains that are 'directly occasioned' by the breach are recoverable.