expectation

contract law

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Last updated

June 26, 2026

Quick Summary

In contract law, "expectation" refers to the damages awarded to a party when the other party fails to fulfill their contractual obligations. These damages aim to put the non-breaching party in the economic position they would have occupied had the contract been fully performed. This includes anticipated profits from the contract.12

This contrasts with "reliance damages," which reimburse a party for actual losses incurred due to their reliance on the contract being fulfilled. Contract law establishes rules for assuming, performing, and enforcing obligations, providing sanctions for non-performance. Legal systems use various methods to limit damages when they become unreasonably large.12

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damages
…given the breaching party, (2) expectation, which rewards him as if the contract had been fully performed (this includes profits anticipated on the contract), and (3) reliance, which gives him compensation for expenditures made or liabilities incurred “in reliance on” the contract’s being performed. Reliance damages are limited to consequences…
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…given the breaching party, (2) expectation, which rewards him as if the contract had been fully performed (this includes profits anticipated on the contract), and (3) reliance, which gives him compensation for expenditures made or liabilities incurred “in reliance on” the contract’s being performed. Reliance damages are limited to consequences…
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