Lancellotti v. Thomas

Brief Fact Summary. This case involves an agreement where one party breached and then demanded return of payment that he made prior to breaching.

Synopsis of Rule of Law. A breaching party is entitled to restitution in excess of the loss caused by the breach.

Facts. The Appellant entered into an agreement with the Appellee, where the Appellant agreed to purchase the Appellee’s luncheonette business and to rent the premises on which the business is located. In return, in addition to paying rent, the Appellant agreed to build an addition onto the structure in which the business was located. The Appellant paid $25,000 as specified by the agreement. However, it failed to build the addition. Eventually, the Appellee built the addition. The Appellant lost interest in the business and the Appellee resumed possession. The Appellant then sued, demanding his payment of $25,000.

Issue. Is a breaching party entitled to restitution for payments he made prior to his breach?

Held. Yes. Judgment reversed and remanded for further proceedings. Pennsylvania should follow the modern view of contract law, which allows a breaching party to recover “any benefit