Chronister Oil Co. v. Unocal Ref. & Mktg.

34 F.3d 462 (7th Cir. 1994)55 U.S. (14 How.) 282 (1853)

 

RULE:

The point of an award of damages, whether it is for a breach of contract or for a tort, is, so far as possible, to put the victim where he would have been had the breach or tort not taken place. 

FACTS:


Plaintiff seller and defendant buyer entered into a contract for the sale of gasoline. Plaintiff was unable to perform the contract as promised, although it offered substitute performance. Plaintiff filed suit for damages based on the difference between the contract price and the lower price at which it sold the gasoline to another company. Defendant counterclaimed, arguing that plaintiff had broken the contract and seeking damages equal to the difference between the contract price and the average cost of its inventory from which it made up the loss of the gasoline promised by plaintiff. On appeal, the court affirmed that part of the district court's judgment that found that plaintiff breached the contract.

ISSUE:

Is plaintiff entitled to any other damages other than nominal damages?

ANSWER:

No.

CONCLUSION:

Plaintiff was strictly liable for the breach, and it was immaterial that plaintiff was not responsible for the breach. However, damages to defendant should have been calculated by examining what defendant gave up as a consequence of the breach, and whether it was something of value. Because of the decrease in the price of gasoline, defendant actually benefitted from plaintiff's breach. Thus, defendant was only entitled to nominal damages.

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