Legal Definitions - make one whole

Make one whole is a fundamental principle in contract law and other areas of legal obligation, aiming to restore an injured party to the financial or practical position they would have occupied had a breach or wrongful act never occurred.

The core idea is that when one party fails to uphold their end of an agreement or commits a legal wrong, the other party should receive a remedy that fully compensates them for their losses, effectively "making them whole" as if the breach had not happened. While this concept is straightforward in theory, its practical application can be complex, as it's often challenging to precisely calculate all direct and indirect losses and fully restore someone to their original state.

• Example 1: A Software Development Contract

  Imagine a small business hires a software developer to create a custom inventory management system for $25,000, with a deadline of six months. The developer breaches the contract by delivering an incomplete and non-functional system after eight months, then abandons the project. To "make the business whole," a court might award damages that cover:

  • The cost to hire a different developer to complete and fix the system, which might now be more expensive due to the urgency or complexity of finishing someone else's work (e.g., an additional $18,000).
  • Any lost profits the business incurred during the two-month delay because they couldn't efficiently manage their inventory with the promised system.
  • Costs associated with finding and vetting a new developer.

  This aims to put the business in the position of having a functional system within the original timeframe and budget, plus compensation for any verifiable losses directly caused by the delay and breach.

• Example 2: A Home Renovation Agreement

  Consider a homeowner who contracts with a landscaping company to install a new patio and garden for $12,000. The company breaches the contract by using cheaper, incorrect materials for the patio and failing to install several agreed-upon plants. To "make the homeowner whole," the remedy would likely include:

  • The cost to remove the incorrect patio materials and install the correct ones (e.g., $7,000, which might be more than the original cost due to demolition and re-installation).
  • The cost to purchase and install the missing plants.
  • Potentially, compensation for the inconvenience and disruption caused by having to oversee additional work or deal with the breach.

  The goal is for the homeowner to ultimately have the patio and garden they contracted for, without bearing additional costs or suffering from the company's failure to perform as promised.

• Example 3: A Vehicle Purchase Agreement

  Suppose a customer places a deposit of $1,000 on a specific model of a new car, agreeing to purchase it for $35,000 from a dealership. Before the sale is finalized, the dealership breaches the agreement by selling that exact car to another buyer for a higher price. To "make the customer whole," the dealership would typically be required to:

  • Return the $1,000 deposit.
  • Compensate the customer for the difference if they now have to purchase the same model car from another dealership at a higher price (e.g., $37,000 elsewhere, so an additional $2,000 in damages).
  • Potentially, cover reasonable expenses incurred by the customer in searching for an alternative vehicle after the breach.

  This ensures the customer is not financially worse off due to the dealership's breach and can acquire the desired vehicle without incurring additional, unforeseen costs.