Also known as: benefits of the bargain · benefit-of-the-bargain · expectation interest
Written by attorneys · grounded in primary & secondary sources — see below
The measure of contract damages that places the injured party in the position it would have occupied if the contract had been performed. This measure includes the loss in value of the promised performance plus any other loss caused by the breach, reduced by costs avoided.
Pacific Retail contracted with Park Merchandise for 5,000 conforming units to anchor its spring collection. Park delivered only 1,000 inferior units. Pacific paid rush premiums for substitutes and lost expected website traffic and peak-season sales. The court awards damages measured by the value Pacific would have received from full performance, offset by the marketing expenses it avoided.
Neil agreed to buy a one-of-a-kind surgical robot from Maxwell for use in his rural practice. Maxwell refused to deliver. Because no market substitute existed and lost patient revenues could not be proved with certainty, the court orders specific performance rather than damages to protect Neil's expectation interest in receiving the promised equipment.
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Meinhard and Salmon formed a joint venture to lease a hotel. Salmon secretly obtained an extension and new financing for an adjacent property. The court imposes a constructive trust, requiring Salmon to share the new lease so Meinhard receives the benefit of the bargain he expected from the original venture.
The Nollans sought a permit to rebuild their beachfront home. The commission required a public access easement. The Court holds that the condition must substantially advance the same governmental interest that would justify denial of the permit, ensuring the Nollans receive the benefit of their development rights without an unrelated exaction.
Homeowners installed Omega Flex tubing that later caused a fire. The Pennsylvania Supreme Court applies strict liability standards that allow recovery of the difference between the value of the tubing as warranted and its actual defective condition, giving plaintiffs the benefit of the bargain they expected when purchasing the product.
Padilla pleaded guilty after his attorney failed to advise him that deportation was mandatory. The Supreme Court holds that counsel must provide accurate advice about deportation consequences so that the defendant receives the benefit of the bargain struck in the plea agreement.
Benefit-of-the-bargain damages place the injured party in the position it would have occupied had the contract been performed. Reliance damages reimburse expenditures made in preparation for performance and place the party in the position it would have occupied had the contract never been made.
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A court will refuse specific performance when damages are adequate to protect the injured party's expectation interest. The adequacy determination considers whether the subject matter is unique, whether damages can be proved with reasonable certainty, and whether collection of a damages award is feasible.
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Yes. Any costs the injured party saved because it did not have to perform must be subtracted from the damages award. This prevents the injured party from receiving a windfall greater than the net position it would have occupied had the contract been performed.
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…allowed to build a significantly larger new home with garage on their lot. Finally, appellants can claim the disruption of no expectation interest, both because they have no right to exclude the public under state law, and because, even if they did, they had full advance notice that new development along the coast is conditioned on…