This article offers a theoretical basis for the limited availability of claims in respect of the benefit of a breach of contract in the light of recent cases. It also distinguishes between 'disgorgement' of the full value of the benefit and 'licence fee damages' in respect of some fraction of it

Jaffey, P

English

Brunel University Research Archive

Disgorgement and 'licence fee damages' in contract

The recent English Court of Appeal case of Experience Hendrix v PPX Enterprises
Ltd1
 is the latest to consider the law concerning the liability of a contracting party in
respect of the profits of a breach of contract, following the decision of the House of
Lords in Attorney-General v Blake.
2
 The issue is of practical importance and
theoretical interest. In this note I will outline what I argue is the best interpretation of
Blake and its theoretical basis,3
 and consider its implications for Hendrix. I will deal
first with the claim for all the profits of a breach, and then with the lesser claim for
some fraction of the defendant’s benefit, conceived of as a sort of deemed licence fee
or quid pro quo for breach. The former was described in Blake and Hendrix as an
“account of profits”, but I will refer to it as “disgorgement”.4
 The latter I will refer to
as “licence fee damages”.5
 I will argue that these are distinct types of claim, although
in Blake and Hendrix they were regarded as variants of a single type of claim

Disgorgement and 'licence fee damages' in contract

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