Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8 is an English contract law case, concerning the choice between an award of damages for the cost of curing a defect in a building contract or (when that is unreasonable) for awarding damages for loss of "amenity".

This award was reversed by the Court of Appeal which held that damages should be awarded at the amount required to place Forsyth in the same position as he would have been in had the contract been performed, which in the circumstances was the cost of rebuilding the pool.

[1] The House of Lords allowed the appeal and upheld the judge's award of £2500 for loss of amenity.

Lord Mustill said ‘the law must cater for those occasions where the value of the promise to the promisee exceeds the financial enhancement of his position which full performance will secure.’ So ‘consumer surplus’ was recognised in an award for breach of contract.

a common feature of small building works performed on residential property that the cost of the work is not fully reflected by an increase in the market value of the house, and that comparatively minor deviations from specification or sound workmanship may have no direct financial effect at all.Lord Lloyd said that though courts do not care what damages will be used for, the intention of the innocent party for what he does with them may be relevant to the issue of reasonableness in awarding damages.