measure of damages in contract The principle upon which assessment of actual monetary compensation is to be paid for damage. In general, in the case of contract, there must be restitutio in integrum, i.e., compensation in full must be paid for the proximate damage suffered by the plaintiff. Where a party sustains a loss by reason of a breach of contract he is, as far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed .