The usual measure of damages for breach of contract. It refers to the innocent party's loss of a bargain, such as the profits they would have expected to receive had the contract been performed, less the costs they would have incurred to earn that profit. The aim of expectation loss damages is to put the innocent party in the same position as if the contract had been performed. It is to be contrasted with reliance loss, also a measure of damages for breach of contract and often referred to as wasted expenditure.

It has been held that expectation loss and reliance loss are mutually exclusive to prevent double recovery. However, Chitty on Contracts (Sweet & Maxwell, 34th edition, Chapter 29, paragraph 29-032) states that this is correct if it is interpreted to mean that the claimant should not recover their gross profits expected under the contract and also the wasted expenditure incurred in reliance of the contract which they intended to meet from the gross profit. A claimant should, in principle, be able to recover for both profit and reliance loss as long as both claims do not overlap.

For further guidance, see Practice note, Damages for breach of contract: an overview.