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The importance of distinguishing between the measure of damages in a breach of warranty and deceit claim (MDW Holdings v Norvill)

Published on: 12 July 2022
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Article summary

Dispute Resolution analysis: This case summarises the key legal principles of assessing damages for a breach of warranty and deceit claim in the context of a share sale. The Court of Appeal held that in assessing damages, by calculating the company’s ‘Warranty True’ value less its ‘Warranty False’ value, it is appropriate to decrease the actual value of the shares to reflect a risk of reputational damage notwithstanding that such damage had not, in fact, materialised at the time of the trial. The Court of Appeal referred to cases which highlighted the basis of the compensatory principle and how, ordinarily, the assessment of damages is calculated, in contract, by seeking to place the injured party in the position it would have been in had the contract been performed. The Court of Appeal emphasised that the approach to assessing damages is not mechanical and it is appropriate for the courts to...

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