In contract law, the "Law of the Lost Bargain" (more commonly known as Loss of Bargain) refers to the primary method used by courts to calculate damages when a contract is breached.

 In contract law, the "Law of the Lost Bargain" (more commonly known as Loss of Bargain) refers to the primary method used by courts to calculate damages when a contract is breached.

The goal is to put the innocent party in the same financial position they would have been in if the contract had been fully performed as promised.

1. The Core Principle: Expectation Interest

At the heart of the "lost bargain" is the expectation interest. Unlike tort law, which seeks to put you back where you were before the harm happened, contract law seeks to give you the "benefit of the bargain" you expected to receive.

 * The Formula: 

Example

If you contract a builder to renovate your pub kitchen for £10,000, but they abandon the job halfway through, and you have to pay a new contractor £12,000 to finish it, your "lost bargain" is the extra £2,000 you were forced to spend to get the result you were originally promised.

2. Key Elements of the Claim

To successfully claim for a lost bargain, several factors must be satisfied:

 * A Repudiatory Breach: Generally, the breach must be serious enough that it deprives the innocent party of substantially the whole benefit of the contract (often called a "repudiatory" breach).

 * Causation: You must prove that the loss was directly caused by the breach.

 * Remoteness: The loss must have been foreseeable at the time the contract was made.

 * Mitigation: The innocent party has a duty to take reasonable steps to keep their losses as low as possible (e.g., finding a replacement supplier quickly).

3. Lost Bargain vs. Other Damages

The law distinguishes the "lost bargain" from other types of compensation:

| Type of Damage | Purpose |

|---|---|

| Expectation (Lost Bargain) | To put you in the position you would have been in if the contract worked. |

| Reliance Loss | To refund you for wasted expenditure (money spent preparing for a contract that was never fulfilled). |

| Restitution | To force the breaching party to give back any benefit or payment they already received from you. |

4. The "Market Price" Rule

In simple sales of goods, the lost bargain is often calculated using the market price rule.

 * If a seller fails to deliver a crate of vodka for £500, and the buyer has to buy it elsewhere for £600, the "lost bargain" is the £100 difference.

 * This ensures the buyer still gets the product for a total net cost of £500 (the original "bargain").

Summary for Your Kensington Pub Case

If the Big Paw Russian Bear had a contract with a supplier for a weekly delivery of food and the supplier failed to show up, the pub wouldn't just be entitled to a refund of what they paid. They could potentially claim for the lost profits they would have made from selling that food to customers—this is their "lost bargain."

Would you like me to look into how "lost bargain" damages are calculated specifically for commercial leases or employment contracts?