done in reliance + profit + expected profit - loss avoided - other loss avoided + other loss + other loss = expectation damages = expectation damages III. Expectation Damages vs. Reliance Damages. If the seller resells the goods she should normally be entitled to the difference between the resale price and the contract price. Expectation Damages Contracts – Prof. Merges April 5, 2011 * * * * * * * * * * * * * * * * * * * * * Basic principles “Loss in value” plus “other loss” Rest. Her medical specials (the cost of her medical treatment) amounted to $600. There were no permanent effects from her injuries. 4 … Basic Formula • Remedy at Law: Money Damages • Expectation Measure: o Traditionally, if the buyer breaches a contract for the sale of real property, the seller is entitled to expectation damages, measured by the difference between the contract price and the market price at the time of the breach. = expectation damages = expectation damages = expectation damages II. There are, however, limitations on expectation damages which were established by the famous case of Hadley v. Baxendale, 156 Eng. Expectation Damages Primary tabs Damages awarded when a party breaches a contract that are intended to put the injured party in as good of a position as if the breaching party fully performed its contractual duties. Trying to work out the distinction between reliance and expectation damages as a means of compensation in the event of a breach of contract (for Contracts, clearly): Reliance Damages: a form of compensation that seeks to return the plaintiff to a null financial state, equal to what s/he had prior to the contract. 1854).. •True expectation damages would be lost profits (handling fee) [UCC §1-106] •In this case, it is more efficient to award Market Price minus Contract Price •This measure of damages encourages market efficiency and deters breach [UCC §2-713] •Utility of the rule: Maintains the appropriate incentives to preserve the business Rep. 145 (Ex. Formula B (p. 471 of text) Original wording : Revised wording : cost of reliance cost of perf. You expected Company B to deliver the goods you ordered in the time promised by the vendor. The law recognizes three broad categories of damages. A court needs to determine the appropriate award in a breach of contract case. Explanation of Key Terms In your cause of action for breach of contract, you will be claiming either expectation, reliance, or restitution. Print Remedies for Breach of Contract: Formula for Expectation Damages Worksheet 1. In the law, there are different kinds of damages that can be awarded based on the type of injury. Applying the damages formula to her claim, an insurance adjuster would begin with a figure of between $900 and $3,000 (1.5 to 5 x $600). When you entered into the contract, you expected a certain result. Damages Formula Example: Mary was injured in an auto accident. c. If the breaching party can show that her breach did not cause any ... 1. When expectations damages are not sufficiently ascertainable, a court should permit recovery of reliance damages or restitutionary damages as an alternative. Expectation Damages = $105,000 a. If the buyer breaches one of three formulas may be used to measure the seller’s damages. 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