Definition
A measure of value is a standard by which the worth of goods, services, obligations, or property can be compared and expressed. The term operates on two levels in legal contexts.
1. Economic/monetary sense. Money — particularly lawful currency — functions as the conventional measure of value in commercial and legal transactions. It is the common denominator against which disparate things are rendered comparable: a bushel of wheat, a day's labor, a parcel of land. In this sense, "measure of value" is one of the classic functions of money, alongside medium of exchange and store of value.
2. Damages and remedies sense. In litigation, "measure of value" refers to the legal standard or method used to calculate what a thing is worth for purposes of awarding compensation. Courts must select a measure of value when quantifying damages for breach of contract, conversion, condemnation, destruction of property, or unjust enrichment. The choice of measure — market value, fair value, replacement cost, going-concern value, intrinsic value — is frequently outcome-determinative.
Common Language
Modern common usage (Wiktionary): Not independently defined; treated as a compound of "measure" (a standard of comparison) and "value" (the worth of something). Broadly understood in economics as one of money's three primary functions.
Historical common usage (Webster's 1913): "Measure" is defined as "a standard of comparison; a means of determining quantity, extent, or quality." "Value" is the property of being desirable or useful, expressible in terms of other goods or money.
The ordinary meaning tracks closely to the economic meaning. The legal gap emerges in the damages context: common usage treats measure of value as a descriptive phrase, while legal usage treats it as a term of art requiring a choice among competing methodologies with binding legal consequences. Selecting the wrong measure of value is a reversible error, not a matter of preference.
Common Confusion
Measure of value is sometimes used interchangeably with standard of value or basis of valuation, but these are not identical. Standard of value typically specifies the premise of value being estimated (fair market value, investment value, fair value under a statute). Measure of value, as used in older authorities, is the broader concept — the instrument or unit (usually money) that makes comparison possible at all. In modern damages practice, the distinction collapses; practitioners and courts routinely use all three phrases to mean the methodology governing compensation. Researchers working in historical sources should expect inconsistency.
Why It Matters in Research
Historical sources use "measure of value" in a more philosophical and monetary-theory register than modern legal materials do. Black's and Rapalje & Lawrence both frame the term through classical political economy — the idea that value is relational and requires a third thing (money) to render two other things commensurable. This framing is largely absent from modern damages treatises, which take money's role as given and focus instead on which measure of value (market, replacement, intrinsic) applies to a particular loss. Researchers reading nineteenth-century contract and property opinions must recognize that "measure of value" there often signals a foundational monetary argument, not a specific damages formula.
In condemnation and eminent domain cases, the phrase appears with particular frequency. Courts debating just compensation regularly had to specify what measure of value governed — market value at the time of taking, value to the owner, or some other standard. The evolution of just-compensation doctrine is partly a history of courts choosing among competing measures of value.
In commercial law and currency cases, "measure of value" appears in arguments about whether a particular instrument, commodity, or currency unit can legitimately serve the measuring function — relevant to disputes over gold clauses, depreciated currency, and, in modern contexts, cryptocurrency.
Corpus connections: The term bridges monetary theory, property valuation, contract damages, and remedies. Researchers following a thread from this term may need to move across encyclopedia volumes.
Historical Dictionary Support
Both Black's and Rapalje & Lawrence provide nearly identical definitions, and both draw explicitly from classical economic theory rather than from case law. Black's states that a measure of value is "something by comparing with which any two other things may themselves be compared with each other" — a definition that tracks John Stuart Mill and earlier political economists directly. Rapalje & Lawrence echoes this formulation without material variation.
The agreement between the two sources is notable but also limiting: neither dictionary develops the damages-law dimension of the term, and neither addresses the question of which measure of value applies in specific litigation contexts. This is a gap modern researchers should flag. For practical guidance on the damages applications, historical sources must be supplemented with treatises on damages (Sedgwick, Sutherland) and, for property valuation, condemnation-law materials.
What the historical dictionaries capture well is the logical structure of value measurement: value is relative, not intrinsic; comparison requires a tertium quid; money is the legal system's conventional answer to that need. This background is useful for understanding why courts in the nineteenth century spent considerable effort specifying which money, at which time, at which rate, was to serve as the measure.
Jurisdictional Note
The choice of measure of value in damages cases varies by jurisdiction and by the type of harm at issue. Federal courts applying state law take the state's measure; eminent domain cases under federal takings doctrine default to fair market value. Researchers should not assume a uniform national standard.
Encyclopedia Cross-Reference
The Law Mind Remedies & Equity Encyclopedia: Restitution as an Alternative to Damages — Election of Remedies and the Disgorgement Measure (remedies_43)