What are expectation damages primarily made up of?

Expectation damages are primarily focused on placing the injured party in a position they would have been in had the contract been fully performed. This concept is central to contract law and aims to cover the financial losses incurred as a result of a breach.

The correct answer involves a two-pronged approach: loss in value and other losses that may have arisen due to the breach of contract. The loss in value refers to the difference between the value of what was received and what was expected from the transaction. Other losses can include various consequential damages that directly stem from the breach, such as loss of business opportunities or incurred costs that were relied upon based on the contract.

This comprehensive understanding of expectation damages allows for a fair assessment of the impact of contract breaches, ensuring that the non-breaching party is compensated adequately. On the other hand, options like legal fees or inspection costs, property maintenance costs, and loss of potential rental income are specific costs or losses that might not encompass the broader scope of expectation damages, which include any financial detriment arising from the breach itself.