Paralegal Certification PrepContracts and Business LawMedium
A paralegal is assisting an attorney with a case involving a software development contract. The contract stipulated that 'Widgets Inc.' would pay 'CodeCrafters LLC' $50,000 upon successful completion and delivery of a custom inventory management system. Widgets Inc. accepted the delivered system but later refused to pay, claiming the system had minor bugs that did not prevent its core functionality. CodeCrafters LLC sues for the $50,000. What is the most likely measure of damages CodeCrafters LLC will seek?
- AExpectation damages
- BNominal damages
- CConsequential damages
- DSpecific performance
Show answer & explanationAnswer & explanation
Correct answer: A. Expectation damages
Expectation damages aim to put the non-breaching party in the position they would have been in had the contract been fully performed, which in this case is the $50,000 contract price.
Why the other options are wrong
- B. Nominal damages are a small, symbolic award given when a breach occurred but no actual financial loss can be proven, which is not the case here as CodeCrafters is owed $50,000.
- C. Consequential damages cover indirect losses that resulted from the breach, which are not the primary claim here.
- D. Specific performance is a remedy where the court orders the breaching party to fulfill the contract, typically used for unique goods or real estate, not for monetary payment.
Expectation Damages
Damages awarded in a breach of contract case that aim to place the non-breaching party in the position they would have been in had the contract been fully performed, giving them the 'benefit of the bargain'.
- Most common type of damages for breach.
- Calculated to cover lost profits and costs.
- Must be foreseeable and proven with reasonable certainty.
Memory trick: When a contract breaks, damages aim to mend the financial harm.