Expectation Damages

From the Latin expectation (Latin: "to await").

In one sentence

Money awarded to put a party in the position they would have been in if the contract had been fully performed.

Plain English

Expectation damages measure what you expected to gain from the contract if it had been performed correctly. If you bought a car for $20,000 and it was supposed to be worth $25,000, but the seller breached and you never got it, your expectation damages would be the $5,000 profit you lost. This type of damages focuses on your lost benefit of the bargain—what you reasonably expected to get out of the deal. It's the most common measure of damages in contract cases.

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Example

You contract to buy a rental property that would generate $10,000 in annual rent, but the seller backs out. Your expectation damages would include the lost rental income you would have earned.

Used in a sentence

“The court calculated expectation damages by determining what profit the buyer would have made if the seller had delivered the goods as promised.”

Related terms

Damages

Money awarded by a court to compensate a party for losses caused by a breach or wrongdoing.

Compensatory Damages

Money paid to reimburse a party for actual losses directly caused by a breach or wrongdoing.

Consequential Damages

Money awarded for indirect losses that result from a breach but are not the direct consequence of it.

Reliance Damages

Compensation for losses suffered by relying on a promise, even if no formal contract exists.

Remedy

A legal action or payment a court awards to fix a harm or enforce a right after a breach.

Contract

A legally binding agreement between two or more parties to do or not do something.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.