The primary goal of contract damages is to place the nonbreaching party in what position relative to performance?

• A. Only if the breaching party knew about the special circumstances.
• B. Place the nonbreaching party in the same position as if fully performed.
• C. They can be recovered regardless of foreseeability.
• D. They can be recovered only for direct damages.

Answer: (B)

The main idea here is that contract damages are meant to protect the nonbreaching party’s expectation interest—they should be placed in the position they would have been in if the contract had been fully performed. In other words, the goal is to give them the value of the promised performance as if everything had gone according to plan.

This isn’t about the breaching party’s knowledge of the other party’s special circumstances, and it isn’t about recovering damages without regard to foreseeability. Damages must be those that were foreseeable at the time the contract was made. And the recovery isn’t limited only to direct damages; foreseeable indirect or consequential damages can be recovered as well if they were contemplated or foreseeable.