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Simple English definitions for legal terms
benefit-of-bargain rule
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A quick definition of benefit-of-bargain rule:
The benefit-of-bargain rule is a principle that says if someone breaks a contract or lies about something they are selling, the person who was hurt by it should be paid enough money to make up for what they lost. This means they should get the same amount of money they would have gotten if everything had gone according to plan. For example, if someone sells a car that they say is in perfect condition but it turns out to have a lot of problems, the buyer can ask for the difference between what they paid and what the car is actually worth. This is called the benefit-of-bargain rule.
A more thorough explanation:
The benefit-of-bargain rule is a principle that applies when a party breaches a contract or when a buyer is defrauded by a seller. It states that the aggrieved party should receive an amount that puts them in the same financial position they would have been in if the contract had been fully performed or if the seller had not committed fraud.
For example, if a person enters into a contract to purchase a car for $10,000, but the seller breaches the contract and fails to deliver the car, the buyer may be entitled to damages under the benefit-of-bargain rule. The damages would be the difference between the value of the car as represented in the contract and the actual value of the car. If the car was worth $12,000, the damages would be $2,000.
Similarly, if a seller fraudulently misrepresents the value of a property to a buyer, the buyer may be entitled to damages under the benefit-of-bargain rule. For example, if a seller tells a buyer that a property is worth $500,000 when it is actually worth $400,000, the buyer may be entitled to damages of $100,000.
Overall, the benefit-of-bargain rule is designed to ensure that parties are not unfairly disadvantaged by breaches of contract or fraudulent conduct.