You may be asking, why don't we just say the value of the property is equal to the contract price. After all, that's the price that was agreed to by a willing buyer and a willing seller?

The problem with that is that it would deny the non-breaching party the benefit of the bargain. Very often, the reason for the breach will be that the breacher made a bad deal. The buyer offered to pay too much or the seller agreed to sell too cheap. When they discover they've made a mistake, they breach the contract.

How courts go about determining the fair market value of the property or services that were the subject of the breached contract is a complex issue. We won't get into it at this point, but we'll assume that it can be done. All we're interested in in this exercise is the method of calculating the damages.