Let's try another one. Only this time it'll be about a legit business. For instance, suppose Homeowner and Painter enter into a contract for the painting of Homeowner's house. The contract price is $3,000 and it is anticipated that Painter will spend $500 on paint and other materials in the course of performing the contract.

How do we calculate Painter's damages if Homeowner breaches the contract before Painter has done anything? We look at each of the elements individually.

What is Painter's "loss in value," (i.e., the loss in the value to him of the other party's performance caused by its failure or deficiency)?