Brief Fact Summary.
Defendant agreed to deliver flour to Plaintiff on or before May 1 and accepted $5000 advance for a price if $7/barrel. Defendant did not deliver the flour and the plaintiff sued for damages. The jury returned a verdict for $6,771. Defendant petitioned the Supreme Court.
Synopsis of Rule of Law.
At the point when a party pays an advance under an agreement for the delivery of products, the best possible measure of damages in case of the breach is to refund the advance.
Canfield (defendant) consented to convey flour to Norton and (Bush) (plaintiff), a partnership, at the very latest May 1. The agreement stipulated that the cost of flour would be $7.00 per barrel at the season of conveyance. Bush paid $5,000 ahead of time for the flour and consented to pay the rest of the adjust from that point. Canfield did not convey the flour. Bush brought suit for damages and the matter was attempted before a jury. Proof was presented at trial demonstrating that the cost of flour in New Orleans on May 1 was $5.50 per barrel. The trial court instructed the jury that, if the jury found for Bush, the damage would be the amount Bush paid in advance plus interest. The jury restored a decision for $6,771. Canfield appealed to the Supreme Court of Errors for another trial.
Should the damages endured by an innocent party under a delivery contract under which an advance has been paid be computed by alluding to the cost of the products at the time of delivery?
No. At the point when a party pays an advance under an agreement for the delivery of products, the best possible measure of damages in case of the breach is to refund the advance.
The suit by Bush was for the damages for breach of the contract and not for the return of the advance deposit. Since Bush sued for damages he is entitled to get back damages calculated by considering the value of the goods on the day they should have been delivered. Simply returning the deposit after a suit is filed for damages runs against to the contract principle that a non-breaching party must be compensated for the loss and injuries it faced due to the breach. No authority supports simply giving back the deposit in this factual scenario. It is not correct that the judgement provides justice just because Bush did not recover a large sum of money than it had contracted for. By permitting Canfield, the seller of the goods, to breach of the contract in this case where the price falls at the time of delivery below the contract price, Canfield profits from his breach of the contract and that way cannot be justified. This judgement concludes that the seller with a warranty in all agreements for goods that the price will not get any lower and, and if that happens, it is the buyer who will suffer the loss. Inherent in any sales contract there is the danger of falling prices. It is not the authority of judges to rewrite contracts, but only to make sure that they are performed and enforced properly. Canfield should be bound to act as he agreed to do under the contract. Accordingly, a new trial should be granted.
The main reason to award damages is to indemnify the party that is not at fault for the actions of the breaching party. It is an argument that a party should not seek damages in assumption if a written contract exists. Three is an authority for permitting these kinds of damages under some facts. But, in the present matter, Bush did not try to buy the flour after the breach, but instead he simply sued. A new trial must be granted to seek justice instead of satisfying the litigious nature of the litigants. If the judgement is not correct, if it does not result in an injustice or if it is obvious that the non-breaching party took no other action to limit loss, then there isn't a need for another new trial. Accordingly, no new trial should be granted.
Justice is prevailed by requiring Canfield to refund the advance money. To further support that ruling, Bush, by the time breach had occurred, performed everything that was to done by giving the $5,000. On the other hand, Canfield failed to perform the entire contract. Incase If Bush had not performed at all, it would have only been given the nominal damages. Accordingly, it is justified that Bush gets back the deposit, which shows the damages that are issued because of the breach. A new trial should not be granted.
The defendant real damages faced by the party that is not guilty cannot be provide as the rule for calculating damages. If the parties are contracting for the delivery of goods, the damages for breach of the contract are calculated by considering the value of the goods on the delivery day with additional interest for any delay that exist. If there is a price increase in the goods, then the party that is not breaching will be entitled to that increase. On the other hand, if there is a decrease in price, then the non-breaching party can only get nominal damages. However, there is no set principle to calculate damages if the non-breaching party paid a deposit as advance on the price of purchase under the contract. Canfield would have received a reduced price from that contracted because of his breach. However, the result under these facts requires Canfield to pay back the deposit that was paid as an advance of $5,000 to Bush. Accordingly, no new trial is granted.