injured party was then entitled to, and it is not the contract of which he has been wrongly deprived by the breach, but the performance of the contract. The law in giving him a right of action for damages, therefore, should adjust the damages in such a way as to equal the value of the performance. Not, indeed, necessarily the value of the defendant's performance alone, for in a bilateral contract not yet fully performed by the plaintiff, unless the promises are independent, the performance by the defendant had it been made would necessarily have been accompanied or followed by performance on the part of the plaintiff. The defendant's non-performance, therefore, saves the plaintiff from the labor or expense of wholly or partly performing on his own part, and in order to settle finally the rights of both parties in a single action, the court deducts this saving made by the plaintiff from the value of the performance which the defendant should have made. Moreover, though the time for some performance by the defendant has arrived, the time for all the performance he has promised may not have; and the present value of this future performance must often be discounted. But even for such promised performance the measure of damages is not the value of a present obligation to render this performance in the future. If the case is not tried too soon to make it possible, evidence is admissible to show that in the future the damage if not speculative or remote actually turned out to be greater or less than the value which would have been placed at the time of the breach on the future undertakings in the contract. 5

§ 1340. Exceptions to the principles of compensation.

Though the general principle stated in the preceding section is clear, the rule of compensation is not without exception. There are instances 6 where the law because of the lack of definite proof of damages caused by the non-performance of the defendant's promise or for other reasons allows the plaintiff to recover in an action on a contract such damages as will place him in as good a position as he would have been in had the contract not been entered into. In some instances also the

See infra, §§ 1347, 1393.

See infra, §§ 1341, 1363, 1396, 1402.

8

rule of compensation is infringed by allowing the plaintiff to recover exemplary damages in excess of the value of the wrong. In some jurisdictions it is true such damages are never allowed." But in most jurisdictions exemplary damages are allowed in certain cases. Generally it is only in actions of tort that they are permitted; but in actions for breach of promise to marry exemplary damages are allowed if the defendant's conduct was wanton and such as to show a total disregard of the plaintiff's feelings. In actions against public service companies also for breach of duty which though imposed by law is enforced in an action of contract exemplary damages are often allowed. 10 Likewise, in an action on a statutory bond, breach of which involves a tort for which exemplary damages would be appropriate, such damages are allowed in some jurisdictions,11 but other courts take a contrary view.12 There are also certain

9

The following cases are actions of tort but the rule they state would be applied a fortiori to actions of contract. Burt v. Advertiser Newspaper Co., 154 Mass. 238, 28 N. E. 1, 13 L. R. A. 97; Ellis v. Brockton Publishing Co., 198 Mass. 538, 84 N. E. 1018, 126 Am. St. Rep. 454; Wilson v. Bowen, 64 Mich. 133, 31 N. W. 81; Fay v. Parker, 53 N. H. 342, 16 Am. Rep. 270; Bee Publishing Co. . World Publishing Co., 59 Neb. 713, 82 N. W. 28. In Colorado and Washington, also, except in certain cases where especially permitted by statute such damages are not allowed. Howlett v. Tuttle, 15 Col. 454, 24 Pac. 921; Helland v. Bridenstine, 55 Wash. 470, 104 Pac. 626.

*That they are not generally allowed in actions of contract, see-Baumgarten v. Alliance Assur. Co., 159 Fed. 275; Ford v. Fargason, 120 Ga. 708, 48 S. E. 180; Cumberland & T Co. v. Cartwright & Tel. Co., 128 Ky. 395, 108 S. W. 875; Trout v. Watkins Livery & Co., 148 Mo. App. 621, 130 S. W. 136; Richardson v. Wilmington & R. Co., 126 N. C. 100, 35 S. E. 235. In South Carolina any

breach of contract, accompanied by fraud may be indemnified by exemplary damages. Prince v. State Mutual Life Ins. Co. 77 S. C. 187, 57 S. E. 766.

Jacoby v. Stark, 205 Ill. 34, 68 N, E. 557; Sneve v. Lunder, 100 Minn. 5, 110 N. W. 99; Johnson v. Jenkins, 24 N. Y. 252; Chellis v. Chapman, 125 N. Y. 214, 26 N. E. 308, 11 L. R. A. 784; Kaufman v. Fye, 99 Tenn. 145, 42 S. W. 25.

10 Pullman Co. v. Lutz, 154 Ala. 517, 45 So. 675, 14 L. R. A. (N. S.) 907, 129 Am. St. Rep. 67; Strauss v. Postal & Co., 83 S. C. 22, 64 S. E. 913; Steinberger v. Western Union Tel. Co., 97 Miss. 260, 52 So. 691; Trout v. Watkins Livery & Co., 148 Mo. App. 621, 130 S. W. 136.

11 Floyd v. Hamilton, 33 Ala. 235; Richmond v. Shickler, 57 Iowa, 484, 10 N. W. 882; Renkert v. Elliot, 11 Lea, 235; Gross v. Hays, 73 Tex. 515, 1 S. W. 523; Levy v. Fleischner, 12 Wash. 15, 40 Pac. 384.

12 Cobb v. People, 84 Ill. 511; Johnson v. Williams, 23 Ky. L. Rep. 658, 63 S. W. 759; McClendon v. Wells, 20 S. C. 514; North v. Johnson, 58

other rules of damages which qualify the general principle; as for instance, rules limiting the recovery of consequential damages actually suffered from a breach, 13 confining the damages recoverable for the non-payment of money to interest, 14 and denying as a general rule damages for mental suffering caused by breach of contract.15 But where other than pecuniary benefits are contracted for such damages have been allowed. 16 It should be added that actual damage is not a necessary element of an action of breach of contract. If a contract has been broken and the plaintiff cannot prove that any damage has been caused he is, nevertheless, entitled to nominal damages. 17 Even though the plaintiff is benefited by a breach of contract his action is maintainable, 18

§ 1341. Recovery for the plaintiff's preparations.

Since the measure of recovery in an action of contract is based upon what the defendant should have given the plaintiff, not what the plaintiff has given the defendant or otherwise expended, recovery cannot ordinarily be allowed for expenses incurred by the plaintiff in preparing to perform. Such preparations would have been required if the contract had been carried out, and the only reward which would have been received for them would have been the defendant's performance. To

Minn. 242, 59 N. W. 1012; Emerson v. Skidmore, 7 Tex. Civ. App. 641, 25 S. W. 671.

13 See infra, § 1345.

14 See infra, § 1410.

15 Russell v. Western U. T. Co., 3 Dak. 315, 19 N. W. 408; Beaulieu v. Great Northern Ry., 103 Minn. 47, 114 N. W. 353, 19 L. R. A. (N. S.) 564.

An exception to this rule has been made in actions for breach of promise of marriage. See the following note.

16 Loy v. Reid, 11 Ala. App. 231, 65 So. 855; Lewis v. Holmes, 109 La. 1030, 34 So. 66, 61 L. R. A. 274; Smith v. Leo, 92 Hun, 242, 36 N. Y. S. 949; Vogel v. McAuliffe, 18 R. I. 791, 31 Atl. 1; Wadsworth v. Western U. T. Co., 86 Tenn. 695, 703, 8 S. W.

574, 6 Am. St. Rep. 864. It is perhaps on this principle that such damages have been allowed in an action for breach of promise of marriage. Tobin v. Shaw, 45 Me. 331, 71 Am. Dec. 547; Coolidge v. Neat, 129 Mass. 146; Vanderpool v. Richardson, 52 Mich. 336, 17 N. W. 936.

17 Treadwell v. Tillis, 108 Ala. 262, 18 So. 886; Radloff v. Haase, 196 Ill. 365, 63 N. E. 729; Sloggy v. Crescent Creamery Co., 72 Minn. 316, 75 N. W. 225; VanSchoick v. VanSchoick, 76 N. J. L. 242, 69 Atl. 1080; Coppola v. Kraushaar, 102 N. Y. App. Div. 306, 92 N. Y. S. 436; Cooper v. Clute, 174 N. Car. 366, 93 S. E. 915.

18 Excelsior Needle Co. v. Smith, 61 Conn. 56, 23 Atl. 693.

allow recovery for the expense of preparation as such, involves a rescission with restitution rather than an enforcement of the contract. Nevertheless, in cases where any profits which the plaintiff might have made from the contract are so uncertain, that they cannot be used as an effective measure of damages, the plaintiff has been allowed to recover expenses incurred in preparations.19 It is to be observed that the ordinary common counts by means of which a quasi-contractual right for restitution is generally enforced under common-law procedure cannot be applied to an action to recover expenses of preparation from which the defendant derived no benefit. In allowing such expenses as damages in an action on the contract, a court may be merely enforcing in the only action available a right to restitution which is becoming more clearly recognized as an appropriate alternative remedy for breach of contract. Many cases cited in this section may be explicable on this ground, but in others the plaintiff is allowed to combine some elements of damage appropriate for putting him in as good a position as he would have been in had the contract been performed with the element of expense of preparation. Unless it can be said that by a somewhat artificial presumption the court is justified in assuming that the profit on the contract would at least have equalled the expense of preparation, it is hard to explain these cases satisfactorily. The boundaries distinguishing the cases where expense of preparation can be recovered as damages for breach of contract are somewhat difficult to mark. The cases included are chiefly contracts for building or for work and labor, or for arbitration.20 So for a breach of warranty in the

19

Phillips &c. Co. v. Seymour, 91 U. S. 646, 654, 23 L. Ed. 341; Griffen . Sprague Electric Co., 115 Fed. 749; Curran v. Smith, 149 Fed. 945, 81 C. C. A. 537; Worthington v. Gwin, 119 Ala. 44, 24 So. 739, 43 L. R. A. 382; Cederberg v. Robison, 100 Cal. 93, 34 Pa. 625; McKenzie v. Mitchell, 123 Ga. 72, 51 S. E. 34; Southern Pac. Co. v. American Well Works, 172 Ill. 9, 49 N. E. 575; Paola Gas Co. v. Paola Glass Co., 56 Kan. 614, 44 Pac. 621, 54 Am. St. Rep. 598; Johnson v. Arnold, 2 Cush. 46; New Haven & N. Co. v.

Hayden, 117 Mass. 433; Quay v. Duluth &c. R. Co., 153 Mich. 567, 116 N. W. 1101, 18 L. R. A. (N. S.) 250; People v. Flynn, 189 N. Y. 180, 82 N. E. 169; Nelson v. Hatch, 70 N. Y. App. Div. 206, 75 N. Y. S. 389; K. & R. Filan Co. v. Brady, 172 N. Y. S. 268; Brown v. East Carolina R. Co., 154 N. C. 300, 70 S. E. 625; Rogers v. Davidson, 142 Pa. 436, 21 Atl. 1083; Martin v. Seaboard, etc., Ry., 70 S. C. 8, 48 S. E. 616.

20 See cases in the preceding note.

quality of seeds, though where there is only a partial failure of the crop, the plaintiff is allowed to recover for the difference in value between the crop raised and the crop which should have been raised, some cases hold that where there has been no germination, damages should be measured by the cost of the seed plus the cost of planting, plus the value of the use of the land less any value in the use remaining after the time when the failure of the seed had become obvious.21

Expense of preparations for transacting a business which owing to the defendant's breach of contract was never entered upon has also been allowed. 22

§ 1342. Value.

Since the only compensation a court of law can give is pecuniary, it is constantly necessary in appying the rule of compensation to determine the pecuniary value of performance which has been promised and frequently also of performance which has been given. An attempt to fix pecuniary value involves the use of standards, and different standards are conceivable. There is a standard of market price if there is a market for the performance in question; there is a standard of the cost of replacing; there is the standard of the pecuniary value

21 Moorhead v. Minneapolis Seed Co., 139 Minn. 11, 165 N. W. 484, L. R. A. 1918 C. 391; Reiger v. Worth, 127 N. C. 230, 37 S. E. 217, 52 L. R. A. 362, 80 Am. St. Rep. 798. In the former case the court said: "It is manifest that where there is a partial crop, and that is the usual case, the first measure [Difference between the value of the crop as it was, and as it should have been] is the true one. There is no other. Some of the cases involving partial failures and applying the first measure distinctly state that the second measure is the true one when the loss is total. Vaughan's Seed Store v. Stringfellow, 56 Fla. 708, 48 So. 410; Ford v. Farmers' Exchange, 136 Tenn. 287, 189 S. W. 368, L. R. A. 1917 B. 1106. Still there are cases applying rather as a matter of course and without dis

cussion the first measure when the failure is total. Shaw v. Smith, 45 Kans. 334, 25 Pac. 886, 11 L. R. A. 681; Crutcher v. Elliott, 13 Ky. L. Rep. 592; Van Wyck v. Allen, 69 N. Y. 61, 25 Am. Rep. 136; Depew v. Peck Hardware Co., 121 N. Y. App. Div. 28, 105 N. Y. S. 390." The Minnesota court deemed the measure of damages based on the crop which should have been raised too conjectural where there was a total failure.

22 Taylor Mfg. Co. v. Hatcher Mfg. Co., 39 Fed. 440, 3 L. R. A. 587; Fontaine v. Baxley, 90 Ga. 416, 17 S. E. 1015; Howe Machine Co. v. Bryson, 44 Ia. 159, 24 Am. Rep. 735; K. & R. Film Co. v. Brady, 172 N. Y. S. 268; Sterling O. Co. v. House, 25 W. Va. 64; Ramsey v. Holmes, etc., Co., 85 Wis. 174, 55 N. W. 391.