Application of Propriety and Fairness Principles in Breach of Contract Compensation Decisions
Keywords:
breach of contract, compensation, judge's consideration, appropriateness, evidenceAbstract
This study analyzes the factors that serve as the basis for judges' considerations in determining the form and amount of compensation resulting from breach of contract in civil cases, and examines judges' assessments of material and immaterial compensation. A normative juridical approach with an analytical descriptive specification is used through a literature study of primary, secondary, and tertiary legal materials. The results of the study indicate that judges consider the form and level of breach of contract, the losses suffered as well as causal relationships, provisions in the agreement, legal certainty, and the principles of appropriateness and fairness. Material compensation requires proof of actual loss that can be calculated economically, while immaterial compensation is based on an assessment of appropriateness and fairness because it lacks a standardized calculation formula. Judges use the principle of ex aequo et bono in determining a proportional amount of compensation. Clearer legal certainty regarding the valuation standards for immaterial compensation is needed to prevent decision disparities.
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