How Courts Calculate Damages When a Contract is Breached in New York
If the other side to your agreement hasn’t kept their end of the deal, or, in legal terms, has breached the agreement, perhaps the most important question you face in deciding whether or not to sue comes down to this:
How much money can you reasonably recover for breach of contract under New York law?
If you’ve started to keep your end of the contract, and the other side breaches the agreement, the formula for computing your damages is as follows:
The Formula for Calculating Damages for Breach of Contract
First, you take the full amount you would have been paid had the contract been completed. Then, you deduct two things from that number:
- (1) the amount of any payments the defendant already made under the contract; and,
- (2) the costs you would have incurred had the defendant lived up to their end of the agreement. In this way, the plaintiff gets the benefit of the profit they would have made on the deal had the defendant not breached the agreement.
Naturally, breach of contract actions often entail a fair amount of he said/she said, in terms of assigning blame for the contract not moving forward. Consequently, it is probably a good idea to at least consult with a lawyer who deals with breach of contract issues before making any decisions as to the best way to handle your particular issue.