On March 26, Sanjeev agreed to sell a widget to Anita for $50 000.She paid $10 000 immediately and promised to pay the remainder when he made delivery on August 30.Sanjeev breached the contract, however, by refusing to deliver the widget.On August 30, its market value had dropped to $47 000.Anita cannot recover expectation damages, but she can recover a maximum of $3000 in reliance damages.

Question

Quizplus · Accepted Answer

Anita can recover expectation damages, which aim to put her in the position she would have been in if the contract had been performed. Since the market value of the widget dropped to $47,000, and she was to pay $50,000, her expectation damages would be the difference she expected to benefit, not just her reliance damages. Reliance damages would compensate her for expenses incurred due to her reliance on the contract being fulfilled, which is a different measure of damages.

On March 26, Sanjeev Agreed to Sell a Widget to Anita