Also known as: expectations · legitimate expectation · expectation of privacy · expectation damages
Written by attorneys · grounded in primary & secondary sources — see below
An interest or belief regarding a future position, performance, or use of property that the law protects or considers in determining remedies, liability, or constitutional rights. Courts protect this interest by placing a party in the position it would have occupied had a contract been performed or by weighing it against government action that interferes with reasonable reliance on prior law or permits.
Emerald Enterprises contracted to deliver 500 units of specialized equipment to Elite Dynamics by June 1 at a fixed price. When Emerald failed to deliver, Elite sued for damages. The court measured recovery by determining the position Elite would have occupied if the units had arrived and been resold at the anticipated profit margin, awarding the difference between the contract price and the higher market cost Elite incurred to cover.
Evelyn Ellison owned a downtown parcel she had purchased with plans to build a high-rise after obtaining preliminary zoning approval. The city then enacted a landmark preservation ordinance that barred the project. In her takings claim, the court examined whether the ordinance had interfered with her distinct investment-backed expectations formed under the prior zoning, ultimately finding no compensable taking because she retained reasonable beneficial use of the property.
Select any source to read its text and confirm it supports the definition.
Elena Estrada granted her brother a power of attorney over investment accounts and expressly told him she wanted the funds preserved for her grandchildren's education. When the brother instead liquidated the accounts to pursue personal ventures, the court held that he had violated his duty to act in accordance with Elena's known expectations to the extent they were actually communicated.
Eric Espinoza obtained a building permit and spent $1.2 million on site preparation and foundation work for a mixed-use project. After a change in city council, the municipality attempted to apply a new zoning restriction that would have halted construction. The court recognized that Espinoza had acquired a vested right because he had made substantial expenditures in good-faith reliance on the existing permit, preventing the city from defeating those expectations.
Esther Eisenberg remained in possession of commercial space two weeks after her lease expired. The landlord, Everest Holdings, changed the locks without a court order. Because the lease termination was recent and the method risked damage to Esther's stored inventory, the court ruled that the self-help recovery violated the requirement that any such action occur without causing harm or the reasonable expectation of harm to the tenant or her property.
Echelon Security ordered custom security systems from a supplier under a long-term contract. After learning the supplier had lost its primary component source, Echelon sent a written demand for adequate assurance of timely performance. Until the supplier provided that assurance, Echelon lawfully suspended its own progress payments because the contract imposed an obligation that each party's expectation of receiving due performance would not be impaired.
The expectation interest places the injured party in the position it would have occupied if the contract had been performed. Reliance reimburses losses caused by reliance on the contract, and restitution restores any benefit conferred on the breaching party. A court selects the measure that best achieves the rightful position depending on the facts.
Supporting sources
Courts weigh the extent to which a regulation interferes with distinct investment-backed expectations as one factor in the Penn Central analysis. When a landowner formed reasonable expectations under prior law and the regulation leaves economically viable use, those expectations are usually not sufficient by themselves to establish a compensable taking.
Supporting sources
A party may demand adequate assurance in writing when reasonable grounds for insecurity arise concerning the other's performance. Until assurance is received, the demanding party may suspend performance if commercially reasonable, because the contract itself creates an obligation that each party's expectation of due performance will not be impaired.
Supporting sources
…decisions. Both plaintiff and defendant stand in broad agreement that the law should be fashioned to carry out the reasonable expectations of the parties. Plaintiff, however, presents the following contentions: that the decisions prior to Cary rest upon implicit and erroneous notions of punishing a party for his or her guilt…