Breach of contract damages and liquidated-damages clauses in Singapore
8 reported judgments · 4 courts · contract
Damages from US$39.4m to nominal $1 · liquidated-damages clauses upheld (no penalty) in 3 of 3 challenged, and a 63%-of-price deposit held forfeitable in none
When a contract is breached, the innocent party is entitled to damages measured to put it in the position it would have been in had the contract been performed — from a US$39.4m award for a misdelivery breach down to nominal $1 where a breach is proved but no loss is. A clause fixing the sum payable on breach is enforced as liquidated damages if it is a genuine pre-estimate of loss, but struck down as an unenforceable penalty if extravagant — and a forfeited deposit is treated the same way unless it is reasonable as an earnest. Across these eight leading judgments the courts awarded substantial damages in two and nominal damages in two, upheld the liquidated-damages clause as no penalty in three, and held a 63%-of-price deposit not a true deposit so that there was no right to forfeit it in one. These are decided outcomes on each case's own facts — not a prediction.
What have Singapore courts decided?
When a contract is broken, the innocent party is entitled to damages as of right for the loss resulting from the breach (the principle the Singapore courts draw from RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR(R) 413). The ordinary measure is compensatory: it puts the claimant, so far as money can, in the position it would have been in had the contract been performed — subject to causation, remoteness (loss must arise naturally from the breach or have been within the parties' reasonable contemplation) and the duty to mitigate. Where a breach is proved but no recoverable loss is established, the court awards only nominal damages. The size of an award therefore turns on the proof of loss: in [2025] SGCA 42 (Winson Oil Trading v United Overseas Bank) the Court of Appeal upheld damages of US$39,372,300 for breach of the contracts of carriage, the quantum reflecting the price the bank would have had to pay for a substitute cargo; whereas in [2025] SGHC 64 (Crown Construction v Univel Hospitality) a breach was made out but the losses were not proven, so the court awarded nominal damages of $1. The choice of measure can itself be decisive: in [2025] SGHC(A) 4 (Terrenus Energy SL2 v Attika) the Appellate Division weighed when the "cost of cure" is the right measure where the claimant does not intend to carry out the repairs. A contract may fix in advance the sum payable on breach. Such a clause is enforced as liquidated damages if it is a genuine pre-estimate of the likely loss at the time of contract, but is struck down as an unenforceable penalty if the sum is extravagant and unconscionable in comparison with the greatest loss that could conceivably follow from the breach — the four Dunlop principles, as restated by the Court of Appeal in Denka Advantech Pte Ltd v Seraya Energy Pte Ltd [2021] 1 SLR 631. The legal burden of proving a clause is a penalty rests on the party alleging it. In [2025] SGHC 151 (DMC v DMD) the High Court applied that test to a liquidated-damages clause fixed at $2,700 a day and held it a genuine pre-estimate of loss and not a penalty, so it was enforceable. In [2026] SGDC 151 (AP Media v Motor Image Enterprises) a 50% "Cancellation Fee" of $164,154 was challenged as a penalty, but because the party alleging a penalty bears the burden and adduced no evidence, the court was unable to agree the clause was an unenforceable penalty. And in [2026] SGDC 150 (Hong Seh Motors v Rynenation) the court held the liquidated damages on a Tesla lease payable and the late penalty argument unavailable because it had not been pleaded or supported by evidence below. This page reports how Singapore courts have decided these questions and the damages they have awarded; it is reference information about the law, not legal advice.
These are the damages Singapore courts awarded and the liquidated-damages / penalty / deposit-forfeiture rulings they reached on each case's own facts (the breach proved, the loss established and mitigated, and the wording of the clause) — reported as data, not a prediction of how any particular contract claim would be decided, and not legal advice. For an assessment of a specific situation, consult a qualified Singapore Advocate & Solicitor.
What Singapore courts decided in each reported judgment. Each row is the outcome in that specific case on its own facts; the full reasoning and a verbatim line from the judgment are in the breakdown below.
| Judgment | Outcome (damages awarded / clause enforced?) | Source cases |
|---|---|---|
[2025] SGCA 42 · SGCA The Court of Appeal upheld the award of damages of US$39,372,300 for breach of the contracts of carriage, the quantum reflecting the price UOB would have had to pay for a substitute cargo had it gone into the market to source one. | Damages US$39,372,300 — awarded for breach (upheld on appeal) | |
[2024] SGCA 48 · SGCA The Court of Appeal held that whether a deposit can be forfeited turns on whether it is reasonable as an earnest assessed at the time of contracting, not how much is later forfeited; satisfied that the 63%-of-price deposit was not reasonable as an earnest and so not a true deposit, it held there was no right to forfeit any part of the deposit, the buyers succeeding on that principal legal argument. | Deposit (63% of price) not a true deposit — no right to forfeit any part (penalty rule) | |
[2025] SGHC(A) 4 · SGHC(A) The Appellate Division addressed when the 'cost of cure' is the right measure of damages, and on the liquidated-damages claim held the employer entitled to six days of liquidated damages of $30,600, with only nominal $1,500 for the wind-compliance defect and no general damages for delay on top of the liquidated damages. | Cost of cure refused; 6 days' liquidated damages $30,600 + nominal $1,500 | |
[2025] SGHC 151 · SGHC Applying the Denka Advantech penalty test, the High Court held the liquidated-damages clause was not extravagant or out of all proportion to the greatest conceivable loss, so it was a genuine pre-estimate of loss and not a penalty — the clause was enforceable. | Liquidated-damages clause ($2,700/day) enforced — genuine pre-estimate, not a penalty | |
[2025] SGHC 64 · SGHC The High Court dismissed the claimant's claim and allowed the defendant's counterclaim, but because the defendant had not proven its losses it awarded only nominal damages of $1 — a breach without proven recoverable loss yields nominal damages. | Breach proved, loss not proved — nominal damages $1 | |
[2024] SGHC 9 · SGHC The High Court found both sides liable in damages to each other for their respective breaches of the second tenancy agreement, awarding the plaintiffs damages of $146,333 on their claim and the defendant damages of $411,494.91 on the counterclaim — the compensatory measure quantified to the loss each party proved. | Damages $146,333 (claim) and $411,494.91 (counterclaim) — awarded for breach of tenancy agreements | |
[2026] SGDC 151 · SGDC Because the legal burden of proving a penalty rests on the party alleging it and the defendant adduced no evidence that the 50% fee was not a genuine pre-estimate of the likely loss, the court was unable to agree the clause was an unenforceable penalty — the liquidated-damages clause stood. | 50% Cancellation Fee (liquidated damages $164,154) — not an unenforceable penalty | |
[2026] SGDC 150 · SGDC The court held the liquidated-damages clause plain and unambiguous and the liquidated damages payable by the lessee; the penalty argument failed because it had not been pleaded or supported by evidence below, and the application to adduce fresh evidence on appeal was dismissed. | Liquidated damages payable — penalty argument failed (not pleaded / no evidence) |
The judgments, case by case
A bank (UOB), holder of the bills of lading, sued the carrier for misdelivering a gasoil cargo to a party not entitled to it under the bills.
The Court of Appeal upheld the award of damages of US$39,372,300 for breach of the contracts of carriage, the quantum reflecting the price UOB would have had to pay for a substitute cargo had it gone into the market to source one.
“awarded UOB damages in the sum of US$39,372,300” — [2025] SGCA 42, the judgment
A property developer purported to forfeit a deposit of $1,195,354.42 — about 63% of the purchase price — when the buyers did not complete the sale and purchase of an apartment, later reducing the forfeited sum to 20% of the price and refunding the balance about five years on.
The Court of Appeal held that whether a deposit can be forfeited turns on whether it is reasonable as an earnest assessed at the time of contracting, not how much is later forfeited; satisfied that the 63%-of-price deposit was not reasonable as an earnest and so not a true deposit, it held there was no right to forfeit any part of the deposit, the buyers succeeding on that principal legal argument.
“there was no right to forfeit any part of the deposit” — [2024] SGCA 48, the judgment
An employer sought the 'cost of cure' as damages for defective solar-structure construction without intending to rectify the defects, and claimed liquidated damages for delayed completion.
The Appellate Division addressed when the 'cost of cure' is the right measure of damages, and on the liquidated-damages claim held the employer entitled to six days of liquidated damages of $30,600, with only nominal $1,500 for the wind-compliance defect and no general damages for delay on top of the liquidated damages.
“Terrenus was only entitled to six days of liquidated damages in the sum of $30,600” — [2025] SGHC(A) 4, the judgment
A subcontract fixed liquidated damages at $2,700 a day for delay; the paying party argued the clause was an unenforceable penalty because the sum bore no relation to a genuine pre-estimate of loss.
Applying the Denka Advantech penalty test, the High Court held the liquidated-damages clause was not extravagant or out of all proportion to the greatest conceivable loss, so it was a genuine pre-estimate of loss and not a penalty — the clause was enforceable.
“I hence find that the LD clause at cl 8.5.1 is a genuine pre-estimate of loss and not a penalty” — [2025] SGHC 151, the judgment
A subcontractor sued for damages for breach of contract after the supplier made only partial delivery of furniture and failed to deliver the rest; the supplier counterclaimed.
The High Court dismissed the claimant's claim and allowed the defendant's counterclaim, but because the defendant had not proven its losses it awarded only nominal damages of $1 — a breach without proven recoverable loss yields nominal damages.
“I award nominal damages in the sum of $1” — [2025] SGHC 64, the judgment
A landlord and tenants under two tenancy agreements each alleged breaches by the other — the tenants over yielding storeys prematurely and arrears, the landlord on its counterclaim — and the court assessed the damages payable in both directions.
The High Court found both sides liable in damages to each other for their respective breaches of the second tenancy agreement, awarding the plaintiffs damages of $146,333 on their claim and the defendant damages of $411,494.91 on the counterclaim — the compensatory measure quantified to the loss each party proved.
“The plaintiffs are entitled to recover damages in the sum of $146,333 from the defendant on the plaintiff’s claim” — [2024] SGHC 9, the judgment
A media company claimed liquidated damages of $164,154 (a 50% 'Cancellation Fee') after a cancellation; the defendant argued the clause was an unenforceable penalty.
Because the legal burden of proving a penalty rests on the party alleging it and the defendant adduced no evidence that the 50% fee was not a genuine pre-estimate of the likely loss, the court was unable to agree the clause was an unenforceable penalty — the liquidated-damages clause stood.
“I am unable to agree that cl 5 of the Fee Quote is an unenforceable penalty clause” — [2026] SGDC 151, the judgment
On the termination of a Tesla car lease, the lessor claimed liquidated damages under the agreement; the lessee sought to argue for the first time on appeal that the clause was an unenforceable penalty and to adduce fresh evidence.
The court held the liquidated-damages clause plain and unambiguous and the liquidated damages payable by the lessee; the penalty argument failed because it had not been pleaded or supported by evidence below, and the application to adduce fresh evidence on appeal was dismissed.
“liquidated damages are payable by the defendants under the clause” — [2026] SGDC 150, the judgment
Key questions
How do Singapore courts measure damages for breach of contract?
The innocent party is entitled to damages as of right, and the ordinary measure is compensatory — it puts the claimant, so far as money can, in the position it would have been in had the contract been performed (RDC Concrete v Sato Kogyo [2007] 4 SLR(R) 413), subject to causation, remoteness and the duty to mitigate. The award reflects the loss actually proved: in [2025] SGCA 42 the Court of Appeal upheld damages of US$39,372,300 measured by the cost of a substitute cargo. This describes how the courts have decided the issue; it is not advice on any particular claim.
What are nominal damages, and when are they awarded?
Nominal damages are a token sum awarded where a breach of contract is established but the claimant proves no recoverable loss. In [2025] SGHC 64 the High Court found a breach but, because the losses were not proven, awarded only nominal damages of $1. A proven breach therefore does not guarantee a substantial award — the claimant must also prove its loss.
When is a liquidated-damages clause enforceable rather than a penalty in Singapore?
A clause fixing the sum payable on breach is enforced as liquidated damages if it is a genuine pre-estimate of the likely loss at the time of contract, and struck down as an unenforceable penalty if it is extravagant and unconscionable compared with the greatest loss that could conceivably follow from the breach — the Dunlop principles restated in Denka Advantech [2021] 1 SLR 631. In [2025] SGHC 151 a clause fixed at $2,700 a day was held a genuine pre-estimate and not a penalty, so it was enforceable.
Who has to prove that a clause is a penalty?
The legal burden of proving that a contractual clause is a penalty rests on the party alleging it. In [2026] SGDC 151 a 50% cancellation fee of $164,154 was challenged as a penalty, but because the challenger adduced no evidence the court was unable to agree it was an unenforceable penalty; and in [2026] SGDC 150 a penalty argument raised late, without pleading or evidence, did not succeed, and the liquidated damages were held payable.
Related
contract →Source judgments
Every figure on this page is drawn from a reported Singapore judgment. The cases below are the primary sources; each links to its full judgment.
- [2025] SGCA 42 — Winson Oil Trading Pte. Ltd. v United Overseas Bank Limited · primary source
- [2024] SGCA 48 — Li Jialin & Anor v Wingcrown Investment Pte Ltd · primary source
- [2025] SGHC(A) 4 — Terrenus Energy Sl2 Pte Ltd v Attika Interior + Mep Pte Ltd And Another Appeal · primary source
- [2025] SGHC 151 — Dmc v Dmd · primary source
- [2025] SGHC 64 — Crown Construction Pte Ltd v Univel Hospitality Pte. Ltd. · primary source
- [2024] SGHC 9 — Saha Ram Krishna & 2 Ors v Tan Tai Joum · primary source
- [2026] SGDC 151 — Ap Media Pte. Ltd. v Motor Image Enterprises Pte Ltd · primary source
- [2026] SGDC 150 — Hong Seh Motors Pte Ltd v Rynenation Pte. Ltd. & 2 Ors · primary source
Compiled by the SG Case Law editorial team from primary sources — the judgments themselves and Singapore Statutes Online (sso.agc.gov.sg). · Updated 25 June 2026 · How we compile this
Last updated .