A movie studio hires a famous actor to perform in a
movie at a salary of $800,000. The studio's expected profits from the movie are speculative.
The movie studio spends $500,000 preparing for the movie, including costs to construct the set and rent comeras. At the last minute, the actor breaches the contract by refusing to perform in the movie because of scheduling conflict. The studio is unable to find a qualified substitute so it must abandon the project. The actor has not yet been paid.
What are the movie studio's damages in this situation?
The difference between the contracts
The amount the studio spends
The amount of the original contract
The studio's expected profits