Expectation Damages or Reliance Damages?

A recent Commercial Court decision has addressed the question of whether a party to a contract that has been breached can recover wasted expenditure where an award of damages on that basis would put that party in a better position than it would have been if the contract had been performed.

The facts of the case arose out of a charterparty under which the ship-owner was required to modify the vessel prior to delivery. After these costs had been incurred, it became clear that the charterer would not be able to perform the contract. The circumstances were unusual as the market rate of hire was higher than the charterparty rate of hire. As a result of the breach the ship-owner was able to trade the vessel at the higher market rate...