When a contract is breached, the injured party may seek damages to recover their losses. The law recognizes three general categories of damages: expectation damages, reliance damages, and restitution damages. Each serves a distinct purpose in compensating a plaintiff and ensuring fairness in contractual disputes. Expectation Damages: The Standard Compensation The primary measure of damages for a breach of contract is expectation damages. These damages aim to place the plaintiff in the position they would have been in had the contract been performed as agreed. Courts may calculate this in various ways, including covering pre-contractual expenses or assessing the value of property at the time of trial. However, expectation damages are subject to legal principles such as reasonableness, mitigation, remoteness, and foreseeability. Reliance Damages: Compensating for Investments Made When expectation damages cannot be precisely calculated—such as when lost profits are too speculative—plaintiffs may seek reliance damages. These damages reimburse expenses … Read More