Also known as: loss of value · diminution in value
Written by attorneys · grounded in primary & secondary sources — see below
The diminution in the worth of expected contractual performance or of property to the injured party caused by a breach or tortious conduct. In contract damages this measures the difference between the value of the performance promised and the value of the performance received. In tort damages for injury to a severable item attached to land the owner may elect this measure instead of the reduction in value of the land as a whole.
Luke Latham owns rural property with an antique marble statue bolted to a pedestal. A trespassing neighbor drives a truck into the pedestal and cracks the statue. Luke elects to recover the loss in value to the statue itself rather than the reduction in the market value of the entire parcel. The court awards damages measured by the drop in the statue's standalone worth.
Logan Lane buys a new sedan from a dealer. The car had been damaged and repainted before sale without disclosure. After discovering the prior damage Logan proves the vehicle's market value is $4,000 lower than a comparable undamaged model. The court uses that loss in value as the base for actual damages before considering any punitive award.
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Loss in value equals the difference between the value to the buyer of the goods promised and the value of the goods actually delivered. This component of expectation damages places the buyer in the position that full performance would have produced.
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When a thing attached to land but capable of severance is damaged, the owner may choose damages measured by the reduction in the item's own value instead of the diminution in the value of the entire parcel.
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Loss in value captures only the direct reduction in the worth of the promised performance itself. Incidental or consequential losses such as repair costs or lost profits fall into the separate category of other loss.
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…amount. (3) In a proper case any incidental and consequential damages under § 57A-2-715 may also be recovered. Truck’s Diminution in Value Ample special circumstances take this case out of the “time of acceptance” provision in SDCL 57A-2-714. Here the measure of damages begins with determining the value of the truck at the…