IX. Damages

Breach of Contract

Damages awarded for breach of contract should return the party to the position he would have occupied had the contract not been violated. E. C. Ernst, Inc. v. Manhattan Const. Co. of Texas, 559 F.2d 268, 269 (5TH Cir. 1977) (applying Alabama law). One court has stated that “[t]he measure of damages in a breach of contract case is ‘that sum which would place the injured party in the same condition he would have occupied if the contract had not been breached.” Sanders v. J.W. Snyder Const. Co., Inc., 681 So.2d 576, 579 (Ala. Civ. App. 1996). Profit will be allowed as part of the recovery so long as the amount of the profit can be reasonably ascertained. Id. Damages may not be determined by mere speculation or conjecture. Briggs v. Woodfin, 388 So.2d 1221, 1225 (Ala.Civ.App. 1980).

Homeowner’s Claim for Faulty Construction

A homeowner’s damages for the contractor’s failure to construct the house in a workmanlike manner is measured by the difference between the fair market value of the property as it was constructed, and the fair market value of the property as it should have been constructed. McDonald v. Schwartz, 706 So.2d 1230, 1233 (Ala.Civ.App. 1997); S.S. Steele & Co., Inc. v. Pugh, 473 So.2d 978, 982 (Ala.1985); Crocker v. Reed, 420 So.2d 285 (Ala.Civ.App.1982).

Mental Anguish Damages

Alabama law allows for mental anguish damages for an individual bringing a claim for breach of contract or breach of warranty related to a home. B & M Homes, Inc. v. Hogan, 376 So.2d 667 (Ala. 1979).

Prejudgment Interest

Generally, under Alabama law only liquidated claims justify prejudgment interest. E. C. Ernst, Inc. v. Manhattan Const. Co. of Texas, 551 F.2d 1026, 1042 (5th Cir. 1977) cert. denied Providence Hospital v. Manhattan Const. Co. of Texas, 434 U.S. 1067, 98 S.Ct. 1246, 55 L.Ed.2d 769 (1978) (finding that claims of a general contractor for delays and deficiencies would be to uncertain to qualify for prejudgment interest.). Courts, however, have recognized two exceptions:

U.S. for Use and Ben. of Roper, IBG, a Div. of Roper Corp. v. Reisz, 718 F.2d 1004, 1007-08 (11th Cir. 1983) (applying Alabama law) (finding that contractor was not entitled to prejudgment interest under Alabama law for cost of certain delays caused by subcontractor where the duration of the delay was not certain and where the amount of damages was not ascertainable simply by computation).