ContractDamages
Damage Statistics: Contract Litigation
When a contract is broken, the law's first instinct is not to punish the breaching party but to make the injured party whole--to give them the benefit of the bargain they were promised. This guide explains how courts actually compute contract damages, from the foundational rule of Hadley v. Baxendale through the Uniform Commercial Code's sale-of-goods formulas, liquidated-damages clauses and the penalty bar, the duty to mitigate, the new-business rule for lost profits, and the limited availability of specific performance. It walks through the differences among expectation, reliance, and restitution measures, explains why punitive damages almost never appear in contract cases, and shows how attorney's-fee shifting works. It also looks honestly at "damage statistics"--what aggregate figures can and cannot tell you, why the overwhelming majority of cases settle before any number is entered, and how to read median-award data without being misled. Worked hypotheticals featuring clearly labeled parties illustrate each measure. The article closes with a FAQ and a plain-language disclaimer.