Understanding Loss of Bargain: Legal Insights and Implications
Definition & Meaning
Loss of bargain refers to a legal concept used to determine damages when a party is unable to fulfill a contract due to another party's breach or wrongdoing. Essentially, it assesses the financial loss incurred due to the difference between what was expected from the contract and what was actually received. This concept is crucial in various legal disputes, particularly in contract law, where it helps establish the monetary compensation owed to the aggrieved party.
Legal Use & context
Loss of bargain is primarily utilized in contract law, where it serves as a foundation for calculating damages in cases of breach of contract. Legal practitioners often rely on this principle to advocate for their clients in civil cases involving business transactions, real estate deals, and service agreements. Users may find it beneficial to explore legal templates provided by US Legal Forms to assist in drafting contracts or filing claims related to loss of bargain.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A homeowner contracts a builder to construct a new deck for $10,000. If the builder fails to complete the project, the homeowner may seek damages based on the cost of hiring another contractor to finish the work, which might be $12,000. The loss of bargain would be the additional $2,000 incurred.
Example 2: A company enters into a contract to purchase 100 units of a product at $50 each. If the supplier breaches the contract and only delivers 50 units, the company can claim damages for the loss of the expected 50 units, which would be $2,500 (50 units x $50).