Kiran agreed to buy machinery from Lee for £40,000. Lee breached the contract by failing to deliver. Kiran bought an identical machine elsewhere for £46,000. Kiran also lost profits of £3,000 that were in both parties' reasonable contemplation. Under English law, what damages can Kiran most likely claim?

Correct answer: B) £9,000

Explanation

Expectation damages aim to put Kiran in the position she would have been in had the contract been performed. Extra cost of a substitute machine = £46,000 - £40,000 = £6,000. Add the foreseeable lost profit of £3,000, giving £6,000 + £3,000 = £9,000. She cannot recover the full £46,000, because she would have paid £40,000 in any event.