Compensatory damages in contract law requires, as the outlines all say, to put the non-breaching party back into the position that that party would have been in had the contract not been breached. That's correct, and worth memorizing, but understanding what it all means will make it easier to apply.
Imagine seller contracts to sell widgets (law tests love widgets) for x dollars. Buyer breaches the contract and seller finds another buyer who will purchase the widgets for .7x dollars.
The compensatory damages here (there may also be other damages) is simply x - .7x = .3x.
The reason for this is that if the non breaching party has already received .7x dollars from buyer 2, and then receives .3x in damages from buyer 1, the seller now has .7x + .3x = x. The seller bargained for x and the seller now has x dollars.
The same analysis holds true if the seller breaches. The seller contracts with the buyer to sell widgets to the buyer for n dollars. The seller breaches and the buyer is now required to purchase those widgets for 1.2n dollars. The buyer should get from the seller 1.2n - n = .2n in compensatory damages.
The buyer has spent 1.2n dollars; if the buyer receives back .2n dollars from seller 1, buyer has spent 1.2n - .2n dollars = n dollars, the amount of the original bargain.
In short, if you get back to the original number, you've gotten to the correct amount of compensatory damages.
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