Benefit-of-the Bargain Damages Law and Legal Definition

Benefit-of-the-bargain damages mean all damages that a breaching party to a contract must pay to the injured party. Generally it will be equal to what the aggrieved party would have received, including profits, if the contract had been fully performed. It is marked by the difference between the security's actual value and what the defendant represented its value to be at the time of the sale. A claim for benefit-of-the-bargain damages must be based on the bargain that was actually struck, and not on a bargain whose terms must be supplied by hypothesis about what the parties would have done if the circumstances surrounding their transaction had been different.

Benefit-of-the bargain damages are an outgrowth of contract principles. It is usually labeled as expectation damages in the contract arena. This method of recovery seeks to put an injured plaintiff in the position he would have been in had his/her expectancy ensued. However, benefit-of-the-bargain damages are not available for negligent misrepresentation, absent proof of an injury independent of the economic loss recoverable for breach of contract. [Newco Drilling Co. v. Weyand, 1999 Tex. App. LEXIS 306 (Tex. App. 1999)].