It is possible for damages to be awarded for mental distress resulting from breach of contract

The mental distress that a person suffers as a result of a breach of a contract, which is intended to provide peace of mind and security, may give rise to a right to compensation. Examples of such contracts are numerous, provided that the plaintiff properly pleads their claim and provides relevant evidence to prove this fact.

The purchase of a property to provide a person with peace and quiet in their retirement or the purchase of a ticket for an event with the purpose of entertainment or recreation are such examples. If there is a breach of the contract and the person is deprived of the opportunity that may lead to a claim for compensation for mental distress.

The particular reasons that led an individual to enter into a contract and the breach that occurred are taken into account in determining whether the individual was justifiably upset and suffered mental distress as a result of the breach of the contract.

This is an exception to the rule under which damages are awarded for breach of contract and the amount awarded cannot be unreasonable, since the courts act within reasonable limits.

Judgement of the Court of Appeal

The Cyprus Court of Appeal examined an unprecedented case in the context of the decision it issued in C.A.106/2018 & 190/2018, dated April 30, where the plaintiff filed a lawsuit and claimed €5,000 for the loss of a phone and the data it contained, in breach of a phone repair agreement.

He claimed the amount because the phone was not repaired and was lost along with its contents, leading to him wasting man-hours to find the lost numbers, plus the value of the phone of €250.

The court of first instance held that the plaintiff had not profided any information to the defendants so that they knew or could foresee that any loss of the phone and numbers contained therein would cause him the damages he claimed to have suffered. In the ordinary course of things the damages he invoked were deemed not to have been reasonably foreseeable by the defendants at the time the agreement was concluded.

Consequently, the court of first instance could not award him compensation for the hours he wasted searching for the lost numbers, but awarded him €250 for the loss of the phone.

The Court of Appeal upheld the first-instance decision, accepting the plaintiff’s testimony and that the consideration was the payment that would be made after the repair and that the plaintiff did not need to sign the receipt form in writing in order to draw up a legally binding contract. It stressed that a contract may be written, oral, partly written and partly oral or inferred from the conduct of the parties, according to section 10(1) of the Contact Law, Cap.149.

It added that there are even implied contracts, where there are implied or explicit terms. Implied terms are terms that have not been expressly agreed upon, but are deemed to be valid when they are necessary for the business related to the contract.

In the present case, an implied term was that the phone would be returned to the plaintiff, a term that the defendants breached. However, it was not clearly stated in his statement of claim that the amount he claimed for the loss of the phone numbers was claimed in the form of general damages.

Decision

The Court of Appeal concluded that general damages may be awarded for mental distress arising from a breach of contract, as an exception to the general rule, and cited examples from English case law. The contract should normally be for the purpose of recreation, amusement, entertainment or peace of mind, for example a contract for the provision of a travel package or a music concert.

It referred to the case of a claimant who was interested in purchasing a property in the countryside for the purposes of peace and quiet after his retirement. He made a contract with a topographer who negligently advised him that the property was not affected by aircraft noise from a nearby airport and so he proceeded to purchase the property.

In due course, the claimant found that the property was affected by aircraft noise pollution and the court awarded him £10,000 in compensation for mental suffering and distress.

The Court of Appeal held that the plaintiff could be awarded a symbolic small amount as general damages, however, his claim did not allow this and his claim was rightly rejected.

George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: [email protected], tel: 24818288