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Discussions Trans-Lex Administrative Information Document-ID: 948500 [click here to copy citation to clipboard] Please Cite as: "http://www.trans-lex.org/948500". Social Networks
No. VII.3.2 - Lost profits/Further damages(a) The party who suffers a loss from the failure of the other party to deliver is entitled to calculate his loss i) based on the difference between the contract price and the price of a replacement transaction (e.g. substitute sale or substitute purchase) concluded within a reasonable time and in a reasonable manner or, ii) based on the difference between the price in the unexecuted contract and the market price current at the date of default and at the place where the contract should have been performed, or, if there is no current price at that place, the current price at such other place that appears reasonable to take as a reference. (b) The aggrieved party may only recover lost net profits. This requires that the benefits of avoiding performance - the operating or other costs avoided by the absence of performance - must be deducted from the value to be received through performance. (c) A claim for compensation of further harm is not excluded by a claim raised under (a) above, provided that such harm was foreseeable under Principle VII.2 and is established with a reasonable degree of certainty. Trans-Lex Commentary [open]Please click below for (full) text references [doctrine] [arbitral awards] [national legislation] [principles / restatements] [international legislation] [model laws] [model terms] [misc.]There are no Threads related to this document. Open one by yourself. |
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Please cite as: "Commentary to Trans-Lex Principle No. VII.3.2 - Lost profits/Further damages, http://www.trans-lex.org/948500"
1 The Principle is based on the idea of damages as full compensation of the losses sustained by the aggrieved party and specifies the ways in which the aggrieved party may calculate the losses to be compensated by the damages.
2 Pursuant to Subsection (a), which is modelled after Art. 75 CISG, the aggrieved party may calculate its loss with reference to a replacement transaction actually concluded by it, provided that this transaction is concluded, for the protection of the non-performing party, within a reasonable time and in a reasonable manner, or with reference to the market price at the date of default and at the place where the contract should have been performed, or, if there is no current price at that place, the current price at such other place that appears reasonable to take as a reference.
3 Subsection (b) makes it clear that damages include lost profit, but that the aggrieved party may claim compensation only for net lost profits in order to ensure that the aggrieved party is not enriched by the damages.
4 Subsection (c) makes it clear that Subsection (a) provides a means for the calculation of minimum damages and that the aggrieved party may always obtain damages for additional harm which it may have sustained, provided that such harm was foreseeable and is established with a reasonable degree of certainty.