Themis Contracts Practice Exam

When a contract is breached, damages aim to put the non-breaching party back where they would have been if the contract had been performed. This includes expectation damages (the value of the promised performance), reliance damages (reimburse expenditures made in reliance on the contract), incidental damages (extra costs incurred because of dealing with the breach), and sometimes consequential damages (foreseeable indirect losses). The costs for materials to finish the mosaic and the parking permit were incurred specifically to perform the contract. Those are classic reliance-type expenditures tied to carrying out the deal, and they would often be recoverable as part of reliance damages or included in expectation damages if they reflect the contract’s value. In contrast, painter’s paintbrushes are ordinary, general-use tools not unique to this contract; reliance damages cover expenditures made in reliance on the contract that would be wasted by a breach, but the cost of such general equipment isn’t recoverable because those tools are likely to be useful in other projects as well. So the paintbrushes’ cost is the least likely to be recovered.