What is the measure of expectation damages under common law?

• A. The difference between the expected value and the actual value
• B. The purchase price of the goods
• C. The cost of replacement
• D. The resale value of the goods

Answer: (A)

Expectation damages are meant to put the nonbreaching party in the position they would have been in if the contract had been performed. The measure is the difference between the value of the promised performance and the value actually received—the loss of the bargain. So if what was promised would have been worth more than what was delivered, the difference is the damages (with possible add-ons for foreseeable incidental or consequential costs and minus any savings from not performing). The other options describe specific price or resale/replacement considerations that aren’t the general measure of expectation damages.