What damages is a builder entitled to if the owner breaches a construction contract?

In the context of construction contracts, a builder is typically entitled to recover expectation and reliance damages when the owner breaches the contract. Expectation damages are designed to put the builder in the position they would have been in had the contract been fulfilled, which includes not only the costs incurred to date but also anticipated profits from the project, if those profits are deemed to be reasonably calculable and based on the terms of the contract.

Reliance damages cover the expenses that the builder incurred in reliance on the contract being upheld, which can include costs for materials, labor, and other expenditures directly tied to the construction project. By allowing recovery for both expectation and reliance damages, the legal framework aims to compensate builders fairly for their losses and to reflect their investment in the project.

In contrast, while liquidated damages may be specified in the contract, they typically apply in situations involving delays or other breaches related specifically to time and performance rather than general damages for breach. Focusing solely on costs incurred or just on future profits would not adequately represent the builder's total losses resulting from the breach. Hence, the comprehensive nature of expectation and reliance damages makes them the appropriate measure for reimbursement in this scenario.