Breach of Contract Damages Calculator
When a contract is breached, the non-breaching party is entitled to compensatory damages designed to restore them to the financial position they would have been in had the contract been performed. Standard categories include expectation damages (the value of the promised performance minus avoided costs), consequential losses (foreseeable indirect losses), and less the mitigation credit (losses the non-breaching party could reasonably have avoided). This calculator structures these components to help you estimate potential recovery. All results are estimates only and do not constitute legal advice.
Breach of contract damages formula
Expectation Damages = Contract Value - Avoided Costs
Net Compensatory Damages = Expectation Damages + Consequential Losses - Mitigation Credit
Pre-judgment Interest = Net Damages * (Annual Rate / 100) * (Months / 12)
Total Recovery = Net Compensatory Damages + Pre-judgment Interest
Expectation damages equal the benefit the non-breaching party would have received, minus what they saved by not performing their side of the bargain. Consequential damages are added for foreseeable indirect losses, then reduced by the mitigation credit. Pre-judgment interest rates are set by state statute and vary; many states use the federal post-judgment interest rate (28 U.S.C. 1961) or a fixed statutory rate as a reference.
Types of contract breach damages
- Expectation damages: the most common remedy, putting the non-breaching party in the position they expected from full performance.
- Reliance damages: reimburse the non-breaching party for out-of-pocket costs incurred in reliance on the contract (used when expectation damages are uncertain).
- Restitution damages: prevent unjust enrichment by requiring the breaching party to return any benefit they received from the non-breaching party.
- Liquidated damages: a pre-agreed amount specified in the contract itself (see the Contract Penalty Calculator).
- Nominal damages: a token amount when breach is proved but no actual loss is demonstrated.
Breach of contract damages calculator: frequently asked questions
What are expectation damages in a breach of contract?
Expectation damages (also called benefit-of-the-bargain damages) are designed to put the non-breaching party in the position they would have been in had the contract been fully performed. They typically equal the value of the promised performance minus any costs the non-breaching party saved by not having to perform their own obligations.
What are consequential damages?
Consequential damages (also called special damages) are losses that flow from the breach but are not the direct value of the contract itself. Examples include lost profits on a downstream contract that could not be fulfilled due to the breach. To be recoverable, consequential damages must have been foreseeable to both parties at the time the contract was formed (Hadley v Baxendale standard).
What is the duty to mitigate?
The non-breaching party has a legal duty to take reasonable steps to reduce or mitigate their damages after a breach. Losses that could have been avoided through reasonable mitigation efforts are not recoverable. For example, if a landlord's tenant breaches a lease, the landlord must make reasonable efforts to re-let the property.
What are nominal damages?
Nominal damages are a very small monetary award (often $1) granted when a breach of contract is proven but the non-breaching party cannot prove any actual financial loss. They serve to establish that the breach occurred and vindicate the non-breaching party's legal rights.
Are these estimates legally binding?
No. This calculator produces rough estimates based on standard contract law principles. Actual damages in litigation are determined by a court based on the specific facts of each case, applicable state law, the terms of the contract, and the evidence presented. Always consult a qualified attorney for advice on your specific situation.
Official sources
- Cornell Law School Legal Information Institute, Contract Damages: Damages (Wex).
- 28 U.S.C. 1961, Post-judgment Interest: 28 U.S.C. 1961.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.