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Law School Case Brief

Mach. Co. v. Tobacco Co. - 141 N.C. 284, 53 S.E. 885 (1906)

Rule:

Generally speaking, the amount that would have been received if the contract had been kept and which will completely indemnify the injured party is the true measure of damages for its breach. Where one violates his contract he is liable for such damages, including gains prevented as well as losses sustained, which may fairly be supposed to have entered into the contemplation of the parties when they made the contract, that is, such as might naturally be expected to follow its violation, and they must be certain, both in their nature and in respect to the cause from which they proceed. 

Facts:

Plaintiff, a cigarette machine manufacturer, filed an action for damages, which alleged that defendant, a cigarette manufacturer, had breached the parties' contract. Specifically, the cigarette manufacturer contracted with the cigarette machine manufacturer to furnish one of its machines at an exposition. The cigarette machine manufacturer alleged that it performed its side of the contract but the cigarette manufacturer refused to exhibit the machine at the exposition as it promised, without any reasonable or valid excuse. The cigarette machine manufacturer alleged that it sustained damages in the way of money paid out and loss of profits. The lower court entered judgment for the plaintiff, the judgment from which defendant appealed.

Issue:

Was the cigarette manufacturer entitled to a new trial to prove damages?

Answer:

Yes

Conclusion:

On appeal, the court granted a new trial. The cigarette manufacturer claimed that it was to have free space in the exposition building, and that this was a condition precedent annexed to the contract. It argued that this was not provided. There was evidence to support this contention. The jury charge as to damages was too broad and too indefinite. A party who has broken his contract cannot escape liability because of the difficulty there may be in finding a perfect measure of damages. In this case, it appears that the jury, by their verdict, concluded that the defendant violated the contract without any just cause or legal excuse. The claim that there was to be free space in the exposition building was neither negatived by the jury nor found by the jury.

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