Legal regulations for determining damages arising from breach of contract in the Civil Code of Mongolia

The private law of Mongolia protects the right to seek compensation for damages resulting from contractual breaches through its fundamental rights framework. The realization of this right depends on the well-founded assessment of damages which exists within the framework of fundamental rights. This paper examines the current legal framework for determining contractual damages through judicial practice in Mongolia while offering specific recommendations for improvement based on international trends and Mongolian characteristics. The paper will analyze how loss of currency rate affects nominal damages through its impact on compensating losses from inflation. It also establishes criteria for identifying expenses as damage types and determine if attorney’s fees qualify as such expenses. Methods to limit damages by focusing on the need to establish causation between obligation breaches and resulting damages and between contract termination acts and resulting damages will be examined. The paper also considers the legal basis for foreseeability as a damage limitation method while explaining why legal norms require foreseeability as a condition for compensation claims.