Keywords
contracts, mental distress, courts, enforceability, damages, intangible, breach of contract
Abstract
As a general rule, contracts law does not permit an award of general damages for mental distress or other intangible loss. There are several rationales for this, including: plaintiffs are to bear their disappointment or upset with mental fortitude; without the rule, courts would be awash in litigation since every breach of contract brings with it some degree of emotional distress; without the rule, plaintiffs may fabricate or exaggerate the degree of their upset; and the rule simply reflects the lack of foreseeability of such loss under Hadley v. Baxendale. Notwithstanding the general rule, courts have awarded mental distress in a variety of circumstances by following one of three strategies to do so: permitting recovery when the contract is non-commercial; permitting recovery when the contract fits within a special or established category of exception to the general rule; and permitting recovery on the basis of foreseeability principles alone. There are a number of reasons to critique the general rule, particularly in light of the House of Lord's much more expansive approach in Farley v. Skinner, [2001] 3 WL.R. 899. In short, an under-inclusive approach to this question results in contracts only being partially enforceable - a result contrary to the foundational principles that parties should be held to their bargain. Based on Farley, this paper offers a proposed restatement of the general rule. It also offers a way of clearly distinguishing between aggravated damages, on the one hand, and general damages for mental distress, on the other
Recommended Citation
Shannon O'Byrne, "Damages for Mental Distress and Other Intangible Loss in a Commercial Context" (2005) 28:2 Dal LJ 311.
