Breach of contract damages come in three main types: expectation damages (benefit of the bargain), reliance damages (costs incurred in reliance), and restitution damages (return of benefits conferred). This calculator helps you estimate each type based on your contract value, breach type, actual losses, and mitigation efforts. This tool is for educational purposes only and does not constitute legal advice. Consult a licensed attorney for your specific situation.
Contract Details
Lost profits + extra costs incurred
Damage Estimates
These estimates are educational guides only. Actual recoverable damages depend on jurisdiction, evidence, judge/jury decisions, and many case-specific factors. Consult a licensed attorney for your specific situation.
How to Calculate Breach of Contract Damages
Contract damages are designed to compensate the non-breaching party for losses caused by the breach — not to punish the breaching party. Understanding the three main damage types helps you evaluate the potential value of a claim and choose the right legal theory for your situation.
Expectation Damages: The Most Common Type
Courts most commonly award expectation damages, which put you in the financial position you'd be in if the contract had been fully performed. Formula: Contract Value - Amount Already Received - Cost Savings from Non-Performance - Mitigation. For a $100,000 contract where you received nothing and lost $80,000 net after a $10,000 substitute contract, expectation damages would be approximately $70,000.
Reliance Damages: Proving What You Spent
Reliance damages are used when expectation damages are too speculative (common in new business ventures) or as an alternative. They cover expenses you incurred because you relied on the contract being performed: equipment purchased, employees hired, materials ordered. These are often easier to prove with receipts than lost profits are to prove with projections.
Restitution: Getting Your Money Back
Restitution returns amounts paid to the breaching party for services not rendered. If you paid $30,000 of a $100,000 contract and received nothing, restitution would return your $30,000 deposit. This is often pursued alongside expectation damages (to recover both the deposit and the benefit lost) or as a standalone remedy when the contract itself is unenforceable.
The Duty to Mitigate
You must take reasonable steps to minimize your damages after a breach. Courts will reduce your award by amounts you could have avoided through reasonable mitigation. If you could have hired a substitute contractor for $15,000 less but didn't, your damages may be reduced by $15,000. Document your mitigation efforts carefully — this shows you acted reasonably and strengthens your claim for the remaining unmitigated damages.
FAQ
Is this contract damages estimator free?
Yes, completely free with no signup required. This tool is for educational purposes only and does not constitute legal advice. Consult a licensed attorney for your specific situation.
What are expectation damages in contract law?
Expectation damages (also called benefit of the bargain damages) put the non-breaching party in the position they would have been in if the contract had been performed. This means the contract value minus any cost savings or benefits received. For a $100,000 contract where you paid $30,000 upfront and saved $20,000 in costs by not having to complete your side, expectation damages might be $50,000.
What are reliance damages?
Reliance damages compensate for costs you incurred in reliance on the contract being performed — essentially, expenses you wouldn't have made if you knew the other party would breach. These are often less than expectation damages but easier to prove. Common in cases where the expected profit was speculative.
What is the duty to mitigate damages?
The non-breaching party has a legal duty to take reasonable steps to minimize their losses after a breach. If you can find a substitute contract or alternative source and fail to do so, courts will reduce your damages by what you could have avoided. Mitigation doesn't mean you must accept an inferior substitute — just reasonable action to reduce harm.
Can I recover lost profits from breach of contract?
Yes, lost profits are a form of expectation damages — the profit you expected to earn from the contract that you won't receive due to the breach. They must be proven with reasonable certainty (not speculation). Established businesses with track records can often recover lost profits; new ventures have a harder time proving anticipated profits.
What is anticipatory breach of contract?
Anticipatory breach occurs when one party announces before performance is due that they won't perform. This allows the non-breaching party to immediately seek damages without waiting for the performance date. The non-breaching party can treat the contract as terminated and pursue remedies immediately, or wait to see if the breaching party changes course.