FIN 240 Chapter Notes - Chapter 19: Oral Contract, Liquidated Damages, Specific Performance
Document Summary
Compensatory - to cover direct losses and costs. Damages that compensate the nonbreaking party for the loss of the bargain. Compensate the injured party only for damages actually sustained and proved to have arisen directly from the loss of the bargain caused by the breach of contract. Must be established that there was a contract between the parties and a breach of that contract. Must be proved that the breach caused damages. Standard measure - difference between the value of the breaching party"s promised performance under the contract and the value of their actual performance. Incidental damages - expenses that are caused directly by a breach of a contract. Sale of goods - usual measure of compensatory damages is an amount equal to the difference between the contract price and the market price. Breach by owner - one may breach before, during, or after performance.
