Pl - Freund
Washington Square Press
plaintiff, an author and a college teacher, and defendant,
Washington Square Press, Inc., entered into a written agreement
which, in relevant part, provided as follows.
("author") granted defendant ("publisher") exclusive rights to
publish and sell in book form plaintiff's work on modern drama.
plaintiff's delivery of the manuscript, defendant agreed to
complete payment of a nonreturnable $ 2,000 "advance".
with 60 days
if defendant deemed the
manuscript not "suitable for publication", it had the
right to terminate the agreement
by written notice within 60 days of delivery.
Unless so terminated,
defendant agreed to publish the work in hardbound edition
within 18 months and afterwards in paperbound edition.
further provided that defendant
would pay royalties to plaintiff, based upon specified
percentages of sales.
Publish with 18 months
failed to publish within 18 months, the contract provided that "this
agreement shall terminate and the rights herein granted to the
Publisher shall revert to the Author.
event all payments theretofore
made to the Author shall belong to the Author without prejudice
to any other remedies which the Author may have.
Pl sought to
(1) delay of
his academic promotion;
(2) loss of
royalties which would have been earned; and
(3) the cost
of publication if plaintiff had made his own arrangements to
Pl had been
promoted. (Court says you were not
royalties were denied.
found, however, that the cost of hardcover publication to
plaintiff was the natural and
probable consequence of the breach and, based upon expert
testimony, awarded $ 10,000 to cover this cost.
recovery of the expenses of paperbound publication on the ground
that plaintiff's proof was conjectural.
Court Majority Decision
the cost of publication was the proper measure of damages.
analogized to the construction contract situation where the cost
of completion may be the proper measure of damages for a
builder's failure to complete a house or for use of wrong
this would be correct if the Pl asked for the printing, binding
and delivery of a number of hardbound copies of his manuscript
to be sold of as he wished.
concluded that the cost of publication is not an appropriate
measure of damages and consequently, that plaintiff may recover
nominal damages only.
Court Of Appeals
with the dissent.
We look to
the basic purpose of damage recovery and the nature and effect
of the parties' contract.
awards damage for breach of contract to compensate for injury
caused by the breach that were
reasonably foreseeable within the
contemplation of the
parties, at the time
the contract was entered into.
attempts to secure to the injured party the benefit of his
bargain, subject to the limitations that the injury -- whether
it be losses suffered or gains prevented -- was
Losses were Foreseeable,
of damages claimed be
measurable with a
reasonable degree of certainty and,
could adequately proven.
In This Case (Reason)
publication would confer a greater advantage than performance of
the contract and place him in a far better position than he
would have occupied had the Df fully performed.
The Pl -
received 2000 upon delivery.
was speculative since there was not a take record.
prestige or other benefits was not argued.
Df to return the manuscript.
If they were
alleged they would need to be foreseeable and ascertainable.
have been measure
value to plaintiff of the promised publication was the royalties
he stood to receive from defendant's sales of the published
represented what it would have cost the
defendant to confer that value upon the plaintiff,
and, by its breach, defendant
saved that cost.
Error Of the
The error by
the courts below was in measuring damages not by the value to
plaintiff of the promised performance but by the cost of that
performance to defendant.
are Measured Rule
not measured, however, by what the defaulting party saved by the
breach, but by the natural and
probable consequences of the breach to the plaintiff.
damage award of $10,000 for the cost of publication to six
cents, but with costs and disbursements to the plaintiff.
modified, with costs and disbursements to plaintiff-respondent,
in accordance with opinion herein and, as so modified, affirmed.