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The owner of a Mexican souvenir store orders floor tiles that include a border design showing the Mexican flag. After the tiles have been fitted, the owner notices that the tiles are decorated with the flag of Italy. The owner wants the tiles to be replaced. 


In a claim for breach of contract, which of the following measure of damages is the court most likely to award?

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In contract law, damages are typically awarded to put the claimant in the position they would have been in had the contract been properly performed. This includes "loss of expectation," which measures the difference between the value of what was promised and what was delivered. However, in this scenario, the most appropriate measure of damages is the "cost of cure," which is the expense incurred to rectify the breach. The owner of the Mexican souvenir store would likely seek the cost of replacing the tiles to meet the original specification (i.e., with the Mexican flag design). This "cost of cure" is the measure of damages that covers the expense of correcting the defective performance. In sale of goods and building contracts, especially where the defective goods have not caused a diminution in market value, the cost of cure is often awarded to ensure the claimant receives what they contracted for. 


Key Point: The "cost of cure" measure of damages is appropriate when the goal is to rectify the breach and put the claimant in the position they would have been in had the contract been performed as agreed, particularly in cases involving defective goods or unsatisfactory work in construction contracts.

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