What damages are recoverable for breach of contract, and what duty to mitigate applies?

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When a contract is breached, the goal of damages is to put the nonbreaching party in the position they would have been in if the contract had been performed. The main measure is expectation damages—the difference between what was promised and what was received, intended to cover the value of the actual performance, including any lost profits if those were part of the bargain. In addition, incidental damages cover reasonable costs incurred in dealing with the breach (like expenses to obtain substitute performance), and consequential damages cover indirect losses (such as lost profits) that were reasonably foreseeable by the parties at the time of contracting as a result of the breach. There’s also a duty to mitigate: the nonbreaching party must take reasonable steps to reduce their losses, such as seeking substitute performance or other steps to limit damages; failure to mitigate typically reduces the damages recoverable. Punitive damages aren’t normally available for breach of contract, since the remedy focuses on compensating for lost expected value rather than punishing the breaching party. Nominal damages may be awarded only if there was a breach but no actual loss.