Is the plaintiff entitled to damages for mental distress and social stigma caused due to breach of contract?

Question: Is the plaintiff entitled to damages for mental distress and social stigma caused due to breach of contract? [UPJS 1999]

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Answer

A plaintiff can sometimes recover damages in tort for injury to his feelings, far exceeding any financial loss suffered by him.

In Addis v. Gramophone Company Limited [(1908-10) All E.R. 1], a company wrongfully dismissed its manager in a way that was “harsh and humiliating“. He recovered damages for his injured feelings or for the loss he might suffer because the dismissal made it more difficult for him to get another job. Damages cannot generally be recovered in the contract for injured feelings or loss of reputation.

Nor can damages be recovered for the anxiety which a breach of contract may cause the injured party; though where actual mental illness results from the breach damages can be recovered in respect of it, provided that it is not too remote a consequence.

Damages for injured feelings are only recoverable in the special case of actions for breach of promise of marriage, which, though technically based on contract, are in many respects more closely analogous to actions in tort. As a general rule, the loss sustained does not include aggravated damages for the disappointment of mind or vexation caused by the hurtful or humiliating manner in which the defendant broke his contract, nor for injury to existing reputation.

There are two kinds of contracts that are exceptions to the general rule, and in which a plaintiff may recover for injury to feelings or reputation.

1. In actions for breach of promise of marriage, damages are given for the plaintiffs’ injured feelings and loss of honorable reputation resulting from the misconduct of the defendant may be taken into account. They are partly punitive
2. Another long-standing exception to the basic pecuniary flavor of contract damages appeared in the anomalous breach of promise of marriage where damages for non-pecuniary loss and even exemplary damages were recoverable

Section 73 of the Indian Contract Act lays down a provision for Compensation for loss or damage caused by a breach of contract. It states,

“When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.”

The expression loss or damage used in the section covers not a merely pecuniary loss but also every other kinds of loss or damage which is suffered by a person as a result of the breach of contract of marriage. Consequently, it has been held in several cases that compensation may be granted for any injury to the plaintiff’s character and reputation or to his prospects in life, as being loss or damage, which naturally arose in the usual course of things from the breach of promise.

Damages for loss of reputation are granted on the ground that the defendant’s breach of promise to marry will render it more difficult for the plaintiff to procure another suitable match. Some damages will also be awarded for the annoyance and injury to feelings that the breach of promise has caused to the plaintiff.

Technically, the breach is based on contract though the situation is more akin to tort. Generally, contracts do protect only economic interests which are in no way affected my injured feelings. N. Sukumaran Nair And Anr. v. P. Narayanan [(1996) 2 MLJ 184]

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

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8. Law of Contract Mains Questions Series Part-VIII
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