Law School Case Brief
Jones v. Lee - 1999-NMCA-008, 126 N.M. 467, 971 P.2d 858
Special damages may be awarded by the fact finder in a breach of contract case if the damages are shown to have resulted as the natural and probable consequence of the breach and, at the time of the formation of the contract, the breaching party reasonably knew or should have anticipated from the facts and circumstances that the damages would probably be incurred. The parties are presumed to have contemplated the ordinary and natural incidents or consequences of nonperformance of the contract.
Defendants Ihn P. Lee and Philomena Lee (Buyers) entered into a written real estate contract but failed to consummate the agreement. Plaintiffs Sam P. Jones and Sharon A. Jones (Sellers) filed suit for breach of the purchase agreement, Buyers filed counterclaims against appellee Sellers and appellee broker-agents, and appellee broker-agents filed a counterclaim for the commission. The district court dismissed Buyers’ counterclaims and entered judgment in favor of Sellers for $157,118.94, which included the difference between the contract price and the actual sale price, assorted special damages, punitive damages, costs and prejudgment interest; and judgment in favor of appellee broker-agents for the commission and attorney fees. Buyers challenged the calculation of compensatory damages and the special damages.
Were the special damages that were contemplated and the ordinary and natural consequences of the breach appropriate?
The court reversed and remanded for the district court to calculate the loss of bargain, which was the difference between the purchase price and the market value of the property at the time of the breach. The special damages that were contemplated and that were the ordinary and natural consequences of the breach were appropriate, and there was evidence to support punitive damages.
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