Lost Profit Damages for Breaches of Commercial Contracts: Examining Common Law and Civil Law Approaches to Recovery and Lessons for Saudia Arabia

This thesis explores the rationale behind the Saudi court's refusal to award damages for loss of future profit in cases of breach of contract. Specifically, the thesis aims to demonstrate that the strict application of the uncertainty principle by the court, which serves as the basis for this denial, has resulted in unjust outcomes for the non-breaching party. Therefore, the thesis has two principal arguments. First, this study contends that the absence of legal rules that provide a framework for establishing certainty in cases involving the loss of future gains from commercial opportunities has caused the Saudi court to treat such losses as uncertain damages that are not eligible for compensation. Second, the thesis employs a comparative investigation to examine how Common and Civil law courts respond to the uncertainty of future damages arising from a breach of contract. It demonstrates that both legal systems strive for certainty by imposing limits on compensatory damages. Additionally, the study illustrates how the legal rules on limiting contractual damages in each jurisdiction aid the court in achieving a level of certainty in the recovery of damages for loss of profit. The ultimate aim is to compensate the claimant for the loss without imposing undue liability on the defendant. Consequently, the primary objective of this study is to provide insights and inspiration for both Saudi courts and legislators, with the ultimate aim of enhancing the current legal practices concerning the recovery of lost profits as damages within the Saudi jurisdiction.