Supreme Court Highlights the Risk of Damages

A $1.85m Reminder That Contractual Liability Must Be Understood

A recent Supreme Court decision involving the sale of a commercial vessel highlights why buyers, sales managers and contract managers must understand the financial consequences of contractual breach. In Great Asia Maritime Ltd v Orion Shipping and Trading LLC [2026], a vessel was contracted for sale at US$15 million. A dispute arose over the seller’s failure to deliver the vessel as required. The buyer cancelled the contract and pursued compensation for the commercial bargain it had lost. The Supreme Court upheld the buyer’s entitlement to US$1.85 million in loss-of-bargain damages.

The seller had argued that the buyer’s exercise of a contractual cancellation right prevented recovery of these damages. The Court rejected that argument, considering the agreement’s compensation provisions. The case provides an important warning for commercial professionals: the financial consequences of breach can extend beyond the immediate cost of correcting a problem. Depending on the contract and applicable law, damages may include lost profits, additional procurement costs or other recoverable financial losses.

For sales managers, the implications are particularly important. Agreeing to contractual obligations without understanding the associated remedies can expose the business to liabilities that substantially exceed the anticipated profit from the contract.

Buyers must similarly understand whether their contractual remedies provide adequate protection when suppliers fail to deliver.

Contract managers need to appreciate how termination provisions, liability caps, exclusions and compensation clauses interact.

Contractual liability is not simply a matter for the legal department. It is a commercial risk that should be understood before contracts are signed and throughout their management. The objective is to help commercial professionals identify legal risks before they become financial losses.

Could Your Organisation Afford to Get Contract Law Wrong?

Contract law is not just for solicitors. Buyers, sales managers and contract managers make commercial decisions every day that can create legally binding obligations and substantial financial liabilities.

DPSS’s Contract Law and Drafting course for Contract Managers, Buyers and Sales Managers, 30 Nov – 1 Dec 2026 will help buyers, sales managers and contract managers understand the legal principles governing contractual obligations, breach, remedies and termination.

Check out our Contract Law Drafting Course here

Source: TLT, Contracts Matter, September 2026