Proving Damages: Practical Basics

Courts generally compensate damages that are proven with reasonable certainty,
not every loss a party feels in practice. This short guide explains common categories and
what evidence typically helps.

1. Direct (out‑of‑pocket) damages

These are amounts that flow naturally from the breach and are easiest to prove:

• Unpaid amounts under the contract
  • Invoices, purchase orders, and bank transfer logs
  • Email confirming acceptance of price / scope
• Refundable deposits and retainers
  • Lease/security deposits, pre‑paid service fees
  • Contract clauses stating when they must be returned
• Replacement / re‑work costs
  • New contractor invoices, repair quotes, shipping fees
  • Before/after photos or QA reports showing the problem

In LegAI, it helps to tag these as 직접손해 / Direct damages and link them to
the relevant timeline events (e.g., “Contract termination”, “Re‑order placed”).

2. Consequential damages and lost profits

These are harder to claim and often reduced if they are too speculative.

• Lost sales or contracts
  • Signed orders that were cancelled solely because of the breach
  • Historic sales data showing a stable pattern that drops after the event
• Operational disruption
  • Downtime logs, system dashboards, traffic stats
  • Extra staffing or overtime records

Good practice:

• Tie each claimed amount to contemporaneous records, not only later spreadsheets.
• Show the calculation method (e.g., average margin × reduced units) in a short memo.

3. Interest, penalties, and costs

• Statutory or contractual interest
  • Often runs from the date of demand, maturity, or filing
  • Keep the demand letter and proof of delivery in the same bundle.
• Collection and enforcement costs
  • Court fees, service fees, notary/legalisation costs
  • Reasonable delivery/courier costs for key documents

Create a simple table:

• Date / Item / Amount / Currency / Evidence reference

LegAI can store this as a note linked to each evidence card, making later updates easier.

4. Practical workflow with LegAI

1. Upload financial records – invoices, statements, payroll, and receipts.
2. Run AI analysis to extract dates, amounts, and counterparties.
3. Build a damages ledger using notes or a spreadsheet, referencing evidence IDs.
4. Link key numbers to timeline events (breach, notice, mitigation steps).
5. Review with counsel to decide which heads of damage are worth pursuing.

This guide is for general information only and is not legal advice.
Courts in each jurisdiction apply their own standards on what level of proof is sufficient.