California Civil Jury Instructions (CACI) (2017)

350. Introduction to Contract Damages

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350.Introduction to Contract Damages
If you decide that [name of plaintiff] has proved [his/her/its] claim
against [name of defendant] for breach of contract, you also must decide
how much money will reasonably compensate [name of plaintiff] for the
harm caused by the breach. This compensation is called “damages.” The
purpose of such damages is to put [name of plaintiff] in as good a
position as [he/she/it] would have been if [name of defendant] had
performed as promised.
To recover damages for any harm, [name of plaintiff] must prove that
when the contract was made, both parties knew or could reasonably
have foreseen that the harm was likely to occur in the ordinary course
of events as result of the breach of the contract.
[Name of plaintiff] also must prove the amount of [his/her/its] damages
according to the following instructions. [He/She/It] does not have to
prove the exact amount of damages. You must not speculate or guess in
awarding damages.
[Name of plaintiff] claims damages for [identify general damages claimed].
New September 2003; Revised October 2004, December 2010
Directions for Use
This instruction should always be read before any of the following specific
damages instructions. (See CACI Nos. 351–360.)
Sources and Authority
• Contract Damages. Civil Code section 3300.
• Damages Must Be Clearly Ascertainable. Civil Code section 3301.
• Damages No Greater Than Benefit of Full Performance. Civil Code section
• Damages Must Be Reasonable. Civil Code section 3359.
• “The basic object of damages is compensation, and in the law of contracts the
theory is that the party injured by a breach should receive as nearly as possible
the equivalent of the benefits of performance. The aim is to put the injured
party in as good a position as he would have been had performance been
rendered as promised. This aim can never be exactly attained yet that is the
problem the trial court is required to resolve.” (Brandon & Tibbs v. George
Kevorkian Accountancy Corp. (1990) 226 Cal.App.3d 442, 455 [277 Cal.Rptr.
40], internal citations omitted.)
• “The damages awarded should, insofar as possible, place the injured party in
the same position it would have held had the contract properly been performed,
but such damage may not exceed the benefit which it would have received had
the promisor performed.” (Brandon & Tibbs, supra, 226 Cal.App.3d at p. 468,
internal citations omitted.)
• “ ‘The rules of law governing the recovery of damages for breach of contract
are very flexible. Their application in the infinite number of situations that arise
is beyond question variable and uncertain. Even more than in the case of other
rules of law, they must be regarded merely as guides to the court, leaving much
to the individual feeling of the court created by the special circumstances of the
particular case.’ ” (Brandon & Tibbs, supra, 226 Cal.App.3d at p. 455, internal
citation omitted.)
• Contractual damages are of two types—general damages (sometimes called
direct damages) and special damages (sometimes called consequential
damages).” (Lewis Jorge Construction Management, Inc. v. Pomona Unified
School Dist. (2004) 34 Cal.4th 960, 968 [22 Cal.Rptr.3d 340, 102 P.3d 257].)
• “General damages are often characterized as those that flow directly and
necessarily from a breach of contract, or that are a natural result of a breach.
Because general damages are a natural and necessary consequence of a contract
breach, they are often said to be within the contemplation of the parties,
meaning that because their occurrence is sufficiently predictable the parties at
the time of contracting are ‘deemed’ to have contemplated them.” (Lewis Jorge
Construction Management, Inc.,supra, 34 Cal.4th at p. 968, internal citations
• “ ‘Contract damages are generally limited to those within the contemplation of
the parties when the contract was entered into or at least reasonably foreseeable
by them at that time; consequential damages beyond the expectation of the
parties are not recoverable. This limitation on available damages serves to
encourage contractual relations and commercial activity by enabling parties to
estimate in advance the financial risks of their enterprise.’ ‘In contrast, tort
damages are awarded to [fully] compensate the victim for [all] injury
suffered.’ ” (Erlich v. Menezes (1999) 21 Cal.4th 543, 550 [87 Cal.Rptr.2d 886,
981 P.2d 978], internal citations omitted.)
• [I]f special circumstances caused some unusual injury, special damages are not
recoverable therefor unless the circumstances were known or should have been
known to the breaching party at the time he entered into the contract.’ ” (Resort
Video, Ltd. v. Laser Video, Inc. (1995) 35 Cal.App.4th 1679, 1697 [42
Cal.Rptr.2d 136], internal citations omitted.)
• “The detriment that is ‘likely to result therefrom’ is that which is foreseeable to
the breaching party at the time the contract is entered into.” (Wallis v. Farmers
Group, Inc. (1990) 220 Cal.App.3d 718, 737 [269 Cal.Rptr. 299], internal
citation omitted.)
• “Where the fact of damages is certain, as here, the amount of damages need not
be calculated with absolute certainty. The law requires only that some
reasonable basis of computation be used, and the result reached can be a
reasonable approximation.” (Acree v. General Motors Acceptance Corp. (2001)
92 Cal.App.4th 385, 398 [112 Cal.Rptr.2d 99], footnotes and internal citations
• “Under contract principles, the nonbreaching party is entitled to recover only
those damages, including lost future profits, which are ‘proximately caused’ by
the specific breach. Or, to put it another way, the breaching party is only liable
to place the nonbreaching party in the same position as if the specific breach
had not occurred. Or, to phrase it still a third way, the breaching party is only
responsible to give the nonbreaching party the benefit of the bargain to the
extent the specific breach deprived that party of its bargain.” (Postal Instant
Press v. Sealy (1996) 43 Cal.App.4th 1704, 1709 [51 Cal.Rptr.2d 365], internal
citations omitted.)
• “[D]amages for mental suffering and emotional distress are generally not
recoverable in an action for breach of an ordinary commercial contract in
California.” (Erlich, supra, 21 Cal.4th 543 at p. 558, internal citations omitted.)
• “Cases permitting recovery for emotional distress typically involve mental
anguish stemming from more personal undertakings the traumatic results of
which were unavoidable. Thus, when the express object of the contract is the
mental and emotional well-being of one of the contracting parties, the breach of
the contract may give rise to damages for mental suffering or emotional
distress.” (Erlich, supra, 21 Cal.4th at p. 559, internal citations omitted.)
• “The right to recover damages for emotional distress for breach of mortuary and
crematorium contracts has been well established in California for many years.”
(Saari v. Jongordon Corp. (1992) 5 Cal.App.4th 797, 803 [7 Cal.Rptr.2d 82],
internal citation omitted.)
Secondary Sources
1 Witkin, Summary of California Law (10th ed. 2005) Contracts, §§ 869–878
California Breach of Contract Remedies (Cont.Ed.Bar 1980; 2001 supp.) Recovery
of Money Damages, §§ 4.1–4.9
13 California Forms of Pleading and Practice, Ch. 140, Contracts,
§§ 140.55–140.56, 140.100–140.106 (Matthew Bender)
15 California Forms of Pleading and Practice, Ch. 177, Damages, § 177.70 et seq.
(Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, §§ 50.10–50.11 (Matthew
6 California Points and Authorities, Ch. 65, Damages: Contract, § 65.20 et seq.
(Matthew Bender)
1 Matthew Bender Practice Guide: California Contract Litigation, Ch. 7, Seeking or
Opposing Damages in Contract Actions, 7.03 et seq.