How are damages measured in the context of breach of contract?

In the context of breach of contract, damages are primarily aimed at restoring the non-breaching party to the position they would have been in had the contract been performed. This concept is grounded in the principle of expectation damages, which seeks to place the injured party in the position they would have enjoyed if the contract had been fulfilled as intended.

Restoration involves covering the losses incurred because of the breach, which could include lost profits, costs incurred due to the breach, and any other relevant expenses directly associated with the failure of the other party to perform their contractual obligations. The focus is on actual loss and the expectation of benefit, which aligns with the idea of bringing the non-breaching party back to their rightful place, thereby fulfilling the contract's intent.

While assessing damages, other factors such as mitigation of damages—where the non-breaching party is expected to take reasonable steps to reduce their losses—come into play, but the overarching goal remains consistent with restoring the injured party as closely as possible to their original position before the breach occurred. This ensures fairness and discourages unjust enrichment while promoting contractual accountability.