Contributed By Pérez-Llorca
Damages compensation comprises the loss suffered and the gain which the creditor failed to obtain.
Should the debtor be in good faith, they will only be liable for foreseen damages or damages which could have been foreseen and are a necessary consequence of the breach or infringement. On the contrary, if the debtor is considered to have acted with wilful misconduct they will be liable for all known damages.
Courts may not award punitive damages unless the parties expressly included the application of a penalty clause in the contract. Nonetheless, the court is allowed to reduce the amount of the penalty where the principal obligation has been performed only partially or irregularly by the debtor.