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The recoverable damages in the case of a contract are such as may reasonably be within the contemplation of the parties at the time of the contract.
Plaintiff leased a jukebox to defendant with a provision regarding payment of proceeds and a minimum weekly payment to plaintiff. Defendant repudiated the contract and plaintiff never installed the jukebox. Plaintiff subsequently rented the jukebox to others. In a breach of contract action, the court granted judgment to plaintiff and awarded plaintiff damages representing the minimum weekly payment for the term of the lease less depreciation and plaintiff's costs. Defendant appealed the damage award, arguing that the rent received on the jukebox should have been credited against the damage award and that the liquidated damages clause of the contract excluded any recovery by plaintiff.
Where a plaintiff lessor agrees to lease an article of which the supply in the market is for practical purposes not limited, is the proper measure of damages the difference between the contract price and the cost of performing the first contract?
The court affirmed, holding that the proper measure of damages was the difference between the contract price and the cost of performing the contract because the supply in the market for jukeboxes was not limited. Furthermore, the court held that the liquidated damages clause was not intended by the parties to apply where the breach occurred before use. Therefore, judgment was affirmed.