Liquidated damages are a sum fixed in advance by the parties to a contract as the amount to be paid in the event of a breach. They are recoverable provided that the sum fixed was a fair pre-estimate of the likely consequences of a breach, but not if they were imposed as a penalty . Unliquidated damages are damages the amount of which is fixed by the court. Damages may also be classified as general and special damages . The purpose of damages in tort is to put the plaintiff in the position he would have been in if the tort had not been committed.
Recovery is limited by the rules of remoteness of damage .
The plaintiff must take reasonable steps to mitigate his losses and so may be expected to undergo medical treatment for his injuries or to seek alternative employment if his injuries prevent him from doing his former job. Damages may also be reduced for the plaintiff's contributory negligence . The purpose of damages in contract is to put the plaintiff in the position he would have been in if the contract had been performed, but, as in the case of damages in tort, recovery is limited by rules relating to remoteness of damage. Again as in the case of torts, the plaintiff is also under a duty to take all reasonable steps to mitigate his losses and cannot claim compensation for any loss caused by his failure to do this. If, for example, a hotel reservation is cancelled, the hotelier must make all reasonable attempts to relet the room for the period in question or as much of it as possible.