What does "expectation" refer to in the context of damages?

In the context of damages, "expectation" refers to the concept of potential loss from a contractual breach. This principle is based on the idea that a party should be compensated for what they would have received if the contract had been performed as agreed. Essentially, it seeks to place the injured party in the position they would have been in had the breach not occurred.

When a party enters into a contract, they often have expectations about the benefits and profits they will gain from that contract. If the contract is breached, the expectation measure allows that party to claim damages equivalent to the expected profits or value that would have arisen from the fulfilled contract. This foundation emphasizes the importance of restoring the loss of opportunity and securing what was anticipated.

In contrast, future income generated from the property and the anticipated value of a performance focus on different aspects of loss, while insurance proceeds pertain to compensations due to property loss and are not specific to contract breaches. Thus, the concept of expectation in damages directly aligns with addressing the financial impact of a contractual breach.