How are damages usually calculated when a warranty is breached?

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When a warranty is breached, the goal is to put the buyer in the position they would have been in if the warranty had been fulfilled. For goods, that means measuring damages by the difference in value between what was promised (the value of the goods as warranted) and what was actually received (the current value of the goods as delivered). That difference captures the lost benefit of the bargain. Incidental and consequential damages related to the breach can also be recoverable, but the baseline is the value gap.

For example, if a product was promised to be premium quality but arrived defective, the damages reflect how much less the product is worth compared to the promised quality. The other measures—like the market price minus contract price, or purely the cost of repair plus incidental damages—do not capture that direct value loss as cleanly, and simply paying the original price ignores the actual diminished value due to the breach.