Opinion ID: 689117
Heading Depth: 2
Heading Rank: 2

Heading: Law of Damages

Text: 19 We begin analysis of this proof by noting that [t]he general rule for measuring damages for breach of contract has long been settled. It is the amount necessary to put the plaintiff in the same economic position he would have been in had the defendant fulfilled his contract. Adams v. Linblad Travel, Inc., 730 F.2d 89, 92 (2d Cir.1984); see also 5 Arthur L. Corbin, Corbin on Contracts, Sec. 992, at 5 (1964); 11 Samuel Williston, A Treatise on the Law of Contracts, Sec. 1338, at 198 (3d ed. 1968). In implementing this general rule, we have stated that when computing damages for a defendant's wrongful conduct, if any benefit or opportunity for benefit appears to have accrued to the plaintiff because of the breach, a balance must be struck between benefit and loss, and the defendant is only chargeable with the net loss. S & K Sales Co. v. Nike, Inc., 816 F.2d 843, 852 (2d Cir.1987) (quoting Stern v. Satra Corp., 539 F.2d 1305, 1311-12 (2d Cir.1976)). 20 These precepts require that revenues due a plaintiff because of a breached contract must be offset by any amount plaintiff saved as a result of the breach. In the typical contract action such an offset usually consists of variable costs, that is, those costs that would have been incurred solely as a result of performance under the contract. See, e.g., Linblad Travel, 730 F.2d at 92-93. But when the breach brings an end to a plaintiff's business the sums to be offset may often include, in addition, fixed costs. Fixed costs are those expenses that would have been incurred as a result of the overall operation of a business, including overhead such as rent, utilities, insurance, salaries and the like.