Which legal principle allows a party to seek damages for non-performance?

The principle that allows a party to seek damages for non-performance is known as expectation damages. This legal concept is rooted in contract law and is designed to put the injured party in the position they would have been in had the contract been fully and properly performed.

When a contract is breached, the non-breaching party can claim expectation damages, which typically involve the value of the benefits they expected to receive from the contract, minus any losses they might have incurred. This measure is meant to compensate the aggrieved party for lost opportunities and profits, reinforcing the notion that contracts should be honored as a matter of both legal and economic integrity.

The other options, while relevant in certain contexts, do not specifically capture the mechanism for seeking damages related to non-performance in a contractual context. The efficiency doctrine focuses on the economic efficiency of resource allocation rather than on remedies for breach. The liquidity requirement typically pertains to financial obligations and the necessity of having readily available assets rather than addressing non-performance outcomes. Restitution of benefits refers to recovering benefits conferred to another party, aiming to prevent unjust enrichment, but it does not specifically address the idea of compensating for expected outcomes that were not realized due to a breach of contract.