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Adams v. Lindblad Travel, Inc. - 730 F.2d 89 (2d Cir. 1984)

Rule:

Interest shall be recovered upon a sum awarded because of a breach of performance of a contract. N.Y. Crim. Proc. Law § 5001(a). Under the law of New York, therefore, prejudgment interest is normally recoverable as a matter of right in an action at law for breach of contract.

Facts:

Plaintiff, a tour operator, entered into a contract with defendants, a wholesaler of adventure tours and its subsidiary, for a joint business venture, under which plaintiff and defendants developed air tours for the southwestern United States for 1980 and 1981, featuring plaintiff as tour operator. Defendants were to promote, market, and sell the tours, using plaintiff's name in their marketing materials, and pay plaintiff a set price per planeload of passengers. During January 1981, defendants sold their version of an itinerary without plaintiff's prior notice but continued to use plaintiff's name in marketing. Plaintiff filed suit for breach of contract and was awarded damages, which the tour operator considered inadequate. 

Issue:

Did the trial court err in its determination of the amount of damages awarded to plaintiff for the breach of contract?

Answer:

Yes

Conclusion:

The court affirmed the order of the district court, which found defendants, a wholesaler of adventure tours and its subsidiary, guilty of breach of contract, but reversed and remanded the case for a redetermination of damages because the district court failed to deduct an amount from plaintiff tour operator's lost profits for his fixed and variable costs of doing business, and failed to allow prejudgment interest.

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