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27 February 2024

The Principles Underlying the Break Even Presumption in Reliance Loss Awards: The Circumstances which Justify the Reversal of the Burden of Proof

Darren Low Jun Jie

Published on e-First 27 February 2024

This article sets out the fundamental legal principles upon which reliance loss awards are made in loss of bargain contexts. It is generally accepted that the basis for awarding a claimant his or her reliance loss is the assumption that were the contract performed, the claimant would have at least fully recovered the costs and expenditure incurred, and the burden to disprove or rebut this shifts to the defendant. This article examines a number of important decisions of the English, Australian and Singapore courts (who have disagreed on the principles that typically arise in these cases) and attempts to clarify and refine these principles underpinning this assumption. It ultimately argues, with reference to the cases and principle, that claimants should be allowed to frame their claims as reliance loss claims but that this should not necessarily mean that a court should make the assumption mentioned above, or that the burden automatically shifts to the defendant if he or she is in fact confronted with a reliance loss claim.