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The employer settled an employment dispute with its former employee out of court. They bound their former employee to a settlement agreement that he would not speak badly of the employer or testify against them in future. He subsequently testified against his former employer and the employer sued for a refund of the settlement amount.

The court was of the view that only nominal damages (equivalent to K500) would be awarded merely to show that there had been a breach of the agreement not to testify. However, the amount was limited to a small sum of nominal damages as loss or damage was not proved. As the court put it, pecuniary compensation intended to put the innocent party in the position he would have been in had the contract not been breached could not be awarded, as there was no loss financially or otherwise proved to have been suffered by the appellants because of the respondent's breach of the settlement agreement.

This case will prove to be one of, if not the leading case on the award of damages under the law of contract. The case brilliantly outlines the purpose of damages, the interests protected and the way damages should be measured and calculated.