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LSDefine
Simple English definitions for legal terms
out-of-pocket rule
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A quick definition of out-of-pocket rule:
The out-of-pocket rule is a principle that says if someone buys something and later finds out they were cheated, they can sue the seller for the difference between what they paid and what the item was actually worth. This is different from the benefit-of-the-bargain rule, which allows the buyer to recover the full amount they paid.
A more thorough explanation:
The out-of-pocket rule is a principle that allows a buyer who has been defrauded to recover damages from the seller. This is done by calculating the difference between the amount paid for the property and the actual value received.
For example, if a buyer purchases a car for $10,000 but later discovers that it is worth only $8,000, the buyer can recover $2,000 in damages from the seller.
This rule is used to ensure that buyers are not left with a financial loss due to fraudulent actions by the seller. It is important to note that this rule only applies to cases where the buyer has suffered a financial loss, and not cases where the buyer has simply been deceived or misled.