A couple leases space in a mall that is not finished by the start date; the mall won’t be ready until August 1. The first month’s rent is waived, but there is no liquidated-damages clause. The delay causes $3,000 in storage costs and $10,000 in lost sales. Which amount are they entitled to recover for the delay?

• A. $3,000, the amount incurred
• B. $13,000, total losses
• C. $10,000, lost profits
• D. $0, none of the above because there was no liquidated damages clause

Answer: (A)

When a contract is breached, damages aim to put the harmed party in the position they would have been in had the contract been performed. This includes direct, foreseeable costs that flow naturally from the breach, even without a liquidated-damages clause.

The delay in making the mall space available creates a direct, foreseeable consequence: items that would have been moved into the space must be stored until occupancy, costing a known amount. Those storage costs are recoverable as incidental damages tied to the breach.

Lost sales represent lost profits, which are more speculative. They depend on proving that the profits were foreseeably contemplated by the parties and can be shown with reasonable certainty. Without a contract provision fixing damages or strong proof of foreseeability and causation, those profits aren’t automatically recoverable.

So the recoverable amount here is the storage cost, $3,000.