A tender holder sought to receive expectation damages, which are damages in the amount of profit had the agreement been enforced, from a tender winner who breached its obligations under the tender, even though it had already forfeited the bank guarantee that the tender winner had provided.
The Supreme Court rejected the tender holder contention and determined that the language of the tender does not allow the tender holder to seek expectation damages in addition to the forfeiture of the guarantee. A guarantee that is required as a condition for participation in the tender and can be forfeited in the event of failure to fulfill the winner obligations, is deemed liquidated damages. As a general rule, a party entitled to liquidated damages for breach of contract must choose between claiming all the actual damages it is entitled to and the liquidated damages. Eligibility to claim liquidated damages in addition to compensation for the actual damage requires an explicit statement in the agreement that it will be possible to claim expectation damages in addition to liquidated damages, in order for the other party to clearly understand that there is a change to the provision of the law and plan its steps accordingly. Here, the tender stipulated that the forfeiture of the guarantee does not constitute a waiver of other rights but did not explicitly state that it will be possible to forfeit and claim expectation damages and the tender holder forfeited the guarantee immediately upon the formation of the breach. Therefore, in the absence of an explicit statement that both remedies can be claimed together, and because the tender holder has already chosen to forfeit the guarantee, it is not entitled to claim compensation in addition thereto.