Commercial Contract Breach Damages Calculator
Quickly estimate potential recovery for breach of contract disputes under California law. Calculate expectation damages, cover damages, lost profits, and more.
Calculate Your Potential Damages
Your Damages Analysis
Damages Breakdown by Component
Cal. Civ. Code §3300: Contract value minus remaining performance costs plus consequential.
Cal. Com. Code §2-712 (goods) or §2A-518 (leases): Cost of cover minus contract price.
Cal. Com. Code §2-713: Market price at breach minus contract price (goods only).
Cal. Com. Code §2-715: Lost profits, if reasonably foreseeable and unavoidable.
Cal. Civ. Code §3336: Out-of-pocket expenses incurred in reliance on contract.
Cal. Civ. Code §1671: Enforceable if reasonable forecast of harm and difficult to calculate.
Cal. Civ. Code §3287(a): 7% statutory rate or contract rate from breach to trial.
Before attorney fees; does not include postjudgment interest or costs.
Net Recovery Comparison (After Attorney Fees)
At 25% Contingency Fee
At 33% Contingency Fee
Understanding Contract Breach Damages Under California Law
Expectation Damages
The benefit of the bargain: the difference between what you were promised and what you received. This is the most common remedy in contract disputes.
Calculation: (Contract price - remaining performance costs) + consequential damages (if foreseeable).
The injured party is placed in the position they would have been in had the contract been performed.
Cover Damages (UCC §2-712 / §2A-518)
Applies when you purchase substitute goods or services to cover the breach. You may recover the difference between the cover price and the contract price, plus reasonable expenses.
Requirements: Cover must be made in good faith, with reasonable care, and within a reasonable time.
Common in sales of goods (UCC Art. 2) and equipment leases (UCC Art. 2A).
Market Differential Damages
When you fail to cover or cannot cover, damages are calculated as the market price at breach minus the contract price. This applies primarily to goods sales.
Calculation: (Market price at time/place of breach - contract price) × quantity, plus incidental damages.
Protects you from losses even if you don't mitigate by purchasing cover.
Consequential Damages (Lost Profits)
Damages that flow indirectly from the breach, such as lost business income or profits. These are NOT automatically recoverable.
Test: Must be reasonably foreseeable at the time the contract was made (Hadley test). Cannot be unreasonably difficult to prove.
Example: If a supplier fails to deliver goods, you can claim lost profits from the resale you couldn't make.
Reliance Damages
Out-of-pocket expenses incurred in reliance on the contract performance. These are actual costs you incurred expecting the contract to be performed.
Examples: Hiring staff, purchasing materials, making deposits, incurring training costs, or paying for preparation.
Useful when expectation damages cannot be accurately calculated.
Liquidated Damages Clauses
Pre-agreed damages specified in the contract. These are enforceable in California only if they represent a reasonable estimate of anticipated damages and are not a penalty.
Test: Must be proportionate to the probable loss contemplated by the parties at contract execution.
If unenforceable as a penalty, you fall back to actual damages (expectation, cover, reliance, etc.).
Prejudgment Interest
Interest accrued on damages from the date of breach until judgment. California's default rate is 10% per annum (formerly 7%).
When Allowed: On unliquidated (non-fixed) damages, if the amount is certain or made certain. Accrues from the breach date.
Contractual interest rates may apply if the contract specifies a different rate.
Mitigation Duty
You have a legal duty to mitigate damages—to take reasonable steps to reduce the harm from the breach. Failure to mitigate can reduce your recovery.
Reasonable Mitigation: Purchasing cover goods, finding substitute services, reducing unnecessary expenses, or seeking alternative business opportunities.
Not Required: You are not required to go into a different line of business or pay an unreasonable price for cover.
Frequently Asked Questions
Expectation damages put you in the position you would have been in if the contract had been performed (benefit of the bargain). Reliance damages only compensate for out-of-pocket expenses incurred in reliance on the contract. You typically choose whichever is higher. Expectation damages include lost profit margin, while reliance damages are limited to actual costs you incurred.
Generally, no—attorney fees are not recoverable in contract disputes unless the contract itself provides for fee recovery, or a statute authorizes it. California Civil Code §1717 allows recovery of attorney fees if the contract includes a prevailing party clause, but both parties must be entitled to recover (mutuality requirement). Some statutes (like consumer protection laws) also authorize fee recovery. This calculator estimates fees at 25-33% on a contingency basis, which is a common fee structure but not court-awarded.
Cover is when you purchase substitute goods or services in response to a breach. Cover damages equal the cost of the cover purchase minus the contract price, plus reasonable incidental expenses (shipping, inspection, etc.). For example, if you contracted to buy widgets at $10 each and the seller breached, but you bought substitute widgets at $15 each, your cover damages are $5 per widget. This must be done in good faith and within a reasonable time (UCC §2-712 for goods sales).
Lost profits are recoverable as consequential damages only if they were reasonably foreseeable to the breaching party at the time the contract was made. This is the Hadley v. Hadley foreseeability test. The breaching party must have had reason to know that their breach would cause these specific losses. Also, lost profits must be reasonably certain (not speculative) and you must prove them with reasonable certainty, not just possibility. Established businesses can usually prove lost profits more easily than startups.
If the contract includes a liquidated damages clause, that pre-agreed amount may be enforceable instead of calculating actual damages. However, California courts will enforce it only if it represents a reasonable estimate of anticipated harm and is not a penalty. If the clause is ruled unenforceable as a penalty, you can recover actual damages instead. This calculator includes a field for liquidated damages; the actual recovery would be whichever is higher (liquidated damages if enforceable, or actual damages calculated).
Prejudgment interest is calculated on the principal damages amount from the date of breach until judgment is entered. California's default statutory rate is 10% per annum (Cal. Civ. Code §3287(a)). If the contract specifies a different interest rate, that rate may apply instead. The interest compounds annually. This calculator estimates prejudgment interest based on the duration from breach to today; actual recovery will extend to the judgment date. Example: $100,000 in damages × 10% × 2 years = $20,000 in prejudgment interest.
Yes. California law requires you to take reasonable steps to mitigate (reduce) damages caused by a breach. Failure to mitigate can reduce your recovery. However, you are not required to take unreasonable steps—such as entering a new business, paying an excessive price for cover, or accepting a substantially different product/service. The duty is to mitigate reasonably under the circumstances. Mitigation typically includes purchasing cover goods at market rates, seeking substitute services, or reducing unnecessary related expenses.
Commercial contract disputes in California typically take 18-36 months to resolve, depending on complexity, court docket, and settlement timing. The process includes pleadings (3-4 months), discovery (6-9 months), motions (2-3 months), trial preparation (2-3 months), and trial/judgment (2-6 months). Many cases settle during discovery or mediation, which accelerates resolution. Private arbitration can be faster (12-24 months). Once judgment is entered, postjudgment interest accrues at the same rate until payment is made.
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