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American Mechanical v. Union Machine
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American Mechanical v. Union Machine | |
Court | Massachusetts Appeals Court |
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Citation | |
Date decided | November 18, 1985 |
Facts
In October 1976, American Mechanical Corporation ("American") contracted to sell its real estate & business equipment to Union Machine Company of Lynn, Incorporated ("Union") for $135,000.
At the time of the transaction, "Union" knew that "American" was under financial pressure. Union gave American a $5,000 check to be held in escrow. 2 days later, Union stopped payment on the check. Within 2 weeks, Union decided to back out of the contract.
Next, American's bank foreclosed its real estate for $55,000 & sold its equipment for $35,000.Procedural History
American sued Union for breach of contract.
The trial court decided in favor of American but only awarded nominal damages.Issues
Is the actual loss from a breach of contract recoverable if it was reasonably foreseeable or within the parties' contemplation when the contract was made?
Holding
Yes. The actual loss from a breach of contract is recoverable if the loss was reasonably foreseeable or within the parties' contemplation when the contract was made.
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