XII.2. 1. What Is The Fact Of Damage?

• Jurisdiction: New York

1. What Is the Fact of Damage?

An essential element of a breach of contract claim is that the breach caused the claimant to suffer damage. The party claiming breach must plead and prove it suffered damage caused by the breach. The party’s pleading must set forth facts from which the court can infer the breach caused damage. Conclusory allegations and conjecture are not sufficient. Boilerplate allegations of damage also are insufficient. In the absence of factual allegations that the breach caused damage, a breach of contract claim is defective and may be dismissed.

The non-breaching party must come forward with evidence that the breach directly and proximately caused it to suffer injury. The breaching party can rebut that contention by presenting evidence that the claimed damages resulted from other causes and/or are too remote from the breach to be recovered. The burden of proof is upon the non-breaching party which must prove, with certainty, that the breach caused it to suffer damage. A court will not excuse the non-breaching party from showing the breach caused it to suffer damage based upon an argument the breaching party’s conduct created uncertainty concerning damages. Conduct which hinders an accurate calculation of damages does not excuse the non-breaching party from its burden of establishing with certainty that the breach caused it to suffer damage.

It is uncertain what the consequence will be if the non-breaching party fails to meet its burden of showing it suffered damage. Some courts have summarily dismissed a breach of contract claim that is not supported by evidence that the breach caused damage. Other courts have refused to summarily dismiss the claim, believing that even if the breach caused no loss, the non-breaching party still may be entitled to recover, as nominal damages, even though it did not establish that the breach caused damage. Nominal damages are damages in name only and not at all compensatory. Nominal damages rest on the premise that whenever there is a breach of contract or an invasion of a legal right, the law infers some damage.⁶⁵¹ Where the non-breaching party fails to present evidence on a motion for summary judgment that it incurred damage resulting from the alleged breach, dismissal of its claim may be...