Contractor A enters into a verbal agreement with Client B to renovate Client B's office. Relying on this agreement, Contractor A purchases materials and hires subcontractors. Before the renovation begins, Client B cancels the agreement without providing a reason. Contractor A seeks compensation for the expenses incurred. What remedy is Contractor A most likely entitled to?
Expectation damages to cover the profit Contractor A would have earned from the contract.
Restitution to recover the expenses Contractor A incurred in reliance on the contract.
Liquidated damages as specified in the contract terms.
Specific performance compelling Client B to proceed with the contract.
Contractor A is entitled to restitution, which allows recovery of expenses incurred in reliance on the contract. Restitution aims to put Contractor A in the position they were in before the agreement. Expectation damages would cover lost profits, which is not the basis for reliance interest. Specific performance is inappropriate as it would compel performance rather than provide monetary compensation. Liquidated damages depend on contract terms, which may not apply in a verbal agreement.
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