R2d § 344
Purposes of Remedies
Judicial remedies under the rules stated in this Restatement serve to protect one or more of the following interests of a promisee: (a) his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, (b) his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made, or (c) his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party.
Professor's notes
Elements (the three protected interests): (a) expectation interest: interest in having the benefit of the bargain by being put in as good a position as if the contract had been performed; (b) reliance interest: interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as if the contract had not been made; (c) restitution interest: interest in having restored to him any benefit conferred on the other party.
Hawkins v. McGee (the hairy hand) operationalizes the expectation interest: damages measured by the difference between promised hand and actual hand, not out-of-pocket cost.
Common misunderstanding: students treat damages as "what was lost." § 344 distinguishes three measures with very different results. Expectation is the default; reliance and restitution are fallbacks when expectation is uncertain or unavailable. The Hawkins lesson is the expectation/reliance distinction.
Cases that operationalize this rule
Text
R2d § 344. Purposes of Remedies.
Judicial remedies under the rules stated in this Restatement serve to protect one or more of the following interests of a promisee:
(a) his “expectation interest,” which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed,
(b) his “reliance interest,” which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made, or
(c) his “restitution interest,” which is his interest in having restored to him any benefit that he has conferred on the other party.