Calculating Expectation Damages - dummies

Calculating Expectation Damages

By Scott J. Burnham

According to the rule of the expectancy, a non-breaching party is entitled to damages that put the non-breaching party in the position it would’ve been in had the contract been fully performed. To use the rule of the expectancy to calculate damages for breach of contract, take the following steps:

  1. Describe what the non-breaching party would’ve had if the contract had been performed.

  2. Describe where the non-breaching party stands now.

  3. Figure out what it would take to bring the non-breaching party from where she is now to where she would’ve been had both parties performed.