| Court: | US Court of Appeals, 2nd ircuit |
| Facts: | Albert Company (plaintiff) contracted to sell four refiners to the plaintiff (Armstrong Rubber). They were late, thereby breaching, and the buyer sued. They counterclaimed that the delay was not excessive. Buyer had installed a $3K foundation for the refiners, bought "rubber scrap" to be refined, and invested in a "reclaim department" to run the refiners. |
| Posture: | Trial court dismissed both suits, but gave seller some damages for a part that got delivered and used (a motor). It denied interest on this value, though. |
| Issue: | Two issues:
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| Holding: | Yes, the interest is appropriate. |
| Rule: | When the value can be ascertained with "reasonable certainty as of a definite time," interest is appropriate. Also, a promisee may recover his outlay in preparation for performance, minus whatever amount the promisor can show that the promisee would have lost had the contract been performed. |
| Reasoning: | The counterclaim for reliance damages seems specious, except for the
foundation. They never really did much with the department, and
they quickly sold off the scrap. Making a contract doesn't make
you an insurer of the other party's venture.
The only difference with recovering the foundation costs is between recovering monies paid to the promisor (accepted) and paid to other people in expectatin of promisor's performance (not normally done). But we're not mandated to decide otherwise, and this seems just. Seller owes for the foundation, buyer owes for the motor plus interest |
| Dicta: | |