Section 4.3 Actual

• Library: Contracts 2016 Supp

1. (§4.3) Actual

In an action for breach of contract under Missouri law, the plaintiff may recover damages that:

· are equal to the benefit of the bargain;

· were naturally and proximately caused by the breach; and

· could have been reasonably foreseen and contemplated by the breaching party at the time the contract was made.

See:

· Gill Constr., Inc. v. 18th & Vine Auth., 157 S.W.3d 699 (Mo. App. W.D. 2004)

· Birdsong v. Bydalek, 953 S.W.2d 103 (Mo. App. S.D. 1997)

· Mansfield v. Trailways, Inc., 732 S.W.2d 547 (Mo. App. S.D. 1987)

· Crank v. Firestone Tire & Rubber Co., 692 S.W.2d 397 (Mo. App. W.D. 1985)

This is consistent with the rule announced in Hadley v. Baxendale, 9 Exch. 341 (1854), the classic case on the subject of damages for breach of contract, which has been generally accepted in both England and America and cited favorably by Missouri courts for over a century. SeeMansfield, 732 S.W.2d 547; W.C. Hardesty Co. v. Schaefer, 139 S.W.2d 1031, 1035 (Mo. App. E.D. 1940); Hughes v. W. Union Tel. Co., 79 Mo. App. 133 (E.D. 1899). The rule laid down in Hadley is, first, that damages that may fairly and reasonably be considered as naturally arising from a breach of contract, according to the usual course of things, are always recoverable; and second, that damages that would not arise in the usual course of things from a breach of the contract, but that do arise from circumstances peculiar to the contract, are recoverable if the special circumstances are known or have been communicated to the breaching party. W.C. Hardesty, 139 S.W.2d at 1035. The principle established in Hadley, 9 Exch. 341, generally limits recovery for breach of contract to those damages that might reasonably have been within the contemplation of the parties at the time they entered into the contract. Wells v. Holiday Inns, Inc., 522 F. Supp. 1023 (W.D. Mo. 1981).

As a general rule, in breach of contract cases, the goal in awarding damages is to put the nonbreaching party in as good a position as if the contract had been performed. Gee v. Payne, 939 S.W.2d 383 (Mo. App. W.D. 1997); Williams v. Hubbard, 789 S.W.2d 810 (Mo. App. W.D. 1990). This concept is echoed in the Missouri Uniform Commercial Code (UCC), Chapter 400, RSMo, at § 400.1-106, RSMo Supp. 2006, which requires the remedies under the UCC to be liberally construed “to the end that the aggrieved party may be put in as good a position as if the other party had fully performed . . . .” Section 400.1-106(1). The interest protected in this way is often referred to as the “expectation interest” or “expectancy,” and it is said to give the injured party the “benefit of the bargain.” Inauen Packaging Equip. Corp. v. Integrated Indus. Servs., Inc., 970 S.W.2d 360 (Mo. App. W.D. 1998); Dierkes v. Blue Cross & Blue Shield of Mo., 991 S.W.2d 662 (Mo. banc 1999); Restatement (Second) of Contracts § 344 (1981). Most often, this...