Expectation damages are an important part of contract law. They are meant to help the party that didn’t break the contract get back to where they would have been if the contract had gone as planned.

These damages are about covering the profits and benefits that the non-breaching party was counting on from the contract.

For example, if a supplier doesn’t deliver goods on time, expectation damages would help the buyer make up for the profits they would have made if the goods had arrived on schedule.

On the other hand, consequential damages come from specific situations that happen because of the breach, but aren’t directly tied to what the contract was worth. These damages cover losses that happen not just because of the breach, but due to the special circumstances of the parties involved.

For instance, if the same supplier’s delay causes the buyer to miss an important deadline, resulting in lost business opportunities, those lost profits could be seen as consequential damages.

Here’s a quick summary of the differences:

• Expectation Damages:

  • Help the non-breaching party get what they expected from the contract.
  • Focus on lost profits that are directly related to the contract.

• Consequential Damages:

  • Deal with additional effects of the breach based on special situations.
  • Include indirect losses that aren’t specifically about the contract’s performance.

Both types of damages are important when it comes to breaches of contract. Knowing the differences between them helps courts decide what the right solution is for each case. Understanding these concepts can help people deal with contract issues and work towards fair outcomes.