Benefit of the Bargain Damages

What must a party prove to get benefit of the bargain damages?

A party seeking benefit of the bargain damages must prove that:

• the other party did not fully perform their contractual obligations,
• the party expected to receive certain benefits from the contract, and
• the other party’s breach of the contract caused them actual harm.

Benefit of the Bargain damages can also include any profits the aggrieved party would have made if the contract had been fully performed.

Case Examples

• In Mazuma Holding Corp. v. Bethke, 21 F. Supp. 3d 221, 227 (E.D.N.Y. 2014), the Court denied benefit of the bargain damages to a company for the value of shares seized by the SEC. The Court also defined benefit of the bargain damages as “the difference between the value of what was bargained for and the value at the time of the transaction of what was received.”
• In Chicago Joe's Tea Room, LLC & Pervis Conway, Plaintiffs, v. The Village of Broadview, Defendant and O'Rourke & Moody LLP, an Illinois Ltd. Liab. P'ship, Petitioner., No. 07 C 2680, 2025 WL 3012658, at *1 (N.D. Ill. Oct. 28, 2025), the Court awarded the third-party defendant O’Rourke & Moody, LLP an equitable lien in a settlement between the parties for legal services the law firm had rendered to the Defendant.

Common issues to consider when evaluating benefit of the bargain damages :

• Did the party seeking damages expect profits from the contract?
• Was the party seeking damages actually injured by the defendant’s breach of contract?
• Did the party seeking damages take reasonable steps to reduce the injury?
• Would granting damages make the parties whole?