expenses would put a premium upon breaking contracts and deny substantial justice." Though the fact that the plaintiff's damage is uncertain in amount or even that it is uncertain that substantial damage has been caused should not deprive the plaintiff of a right to compensation for the loss of the defendant's performance which would have given the plaintiff a chance to make profit or avoid damage, such uncertainty is a good reason for applying some other test, if another test is possible, for estimating his damage than by letting a jury guess at the value of the plaintiff's chance or probability by seeking to estimate his probable profits and losses. For this reason where the performance of which the plaintiff has been deprived has a market value, courts will be more reluctant to allow the test of prospective profits than in a case where if prospective profits are not allowed the plaintiff will be denied relief altogether. Thus where the defendant has wrongfully broken a contract to furnish power to run a mill, some courts restrict the damages to a difference between the rental value of the mill if the contract had been kept and its rental value in view of breach.35 Other courts allow loss of profits to be estimated by the jury.36 But courts which would deny the plaintiff in such a case the right to recover anticipated profits would doubtless allow proof of such profits in a case where no other method of estimating the plaintiff's damage was possible and where, therefore, a rejection of the test of anticipated profits would result in denying the plaintiff all substantial relief. Where a breach of contract involves deprivation of a chance which has value in a business sense, a just reluctance will be felt by most courts to deny altogether the recovery of substantial damages. 35 Abbott v. Gatch, 13 Md. 314, 71 Am. Dec. 635; Griffin v. Colver, 16 N. Y. 489, 69 Am. Dec. 718; Witherbee v. Meyer, 155 N. Y. 446, 50 N. E. 58; Foundry, etc., Co. v. Union Compress, etc., Co., 105 Tenn. 187, 58 S. W. 270, 53 L. R. A. 482; Hurxthal v. St. Lawrence & Co., 65 W. Va. 346, 64 S. E. 355. See also Rogers v. Bemus, 69 Pa. 432; Pallett v. Murphy, 131 Cal. 192, 63 Pac. 366; Wade v. Belmont &c. Co., 87 Neb. 732, 128 N. W. 514, 31 L. R. A. (N. S.) 743. 36 Johnson v. Wild Rice, etc., Co., 118 Minn. 24, 136 N. W. 262; Clifford v. Richardson, 18 Vt. 620. See also Carter v. Cairo, etc., Ry. 145 Ill. App. 653; Carter v. Cairo U. & C. R. Co., 240 Ill. 152, 88 N. E. 493; Willis v. City of Perry, 92 Iowa, 297, 60 N. W. 727, 26 L. R. A. 124. § 1347. Illustrations of consequential damages allowed when the defendant had proper notice. When a defendant has been notified, before entering into the contract in question, of facts indicating that unusual damages will follow or may follow his failure to perform his agreement, he is liable for such damages. Common consequential damages of this sort are those suffered from loss of a resale.37 The defendant may have had notice of a sub-contract but not of the price at which the resale was to be made. In such a case he will be liable for such ordinary profit as might be expected on a resale. 38 Even though no contract for a resale had yet been made by the buyer, damages may be recovered for loss of one, if the probability of such a resale was contemplated," and defendant knew that other goods of the kind contracted for could not be obtained by the buyer. The same principle applies where a seller has notice of a particular use for the goods contracted for, which will be defeated if the contract is not fulfilled. This has been held in regard to contracts to deliver machinery, lack of which caused a loss of production or injury to material, whether the action is against a seller or a carrier.* "Federal Wall Paper Co. v. Kempner, 244 Fed. 240; Jordan v. Patterson, 67 Conn. 473, 35 Atl. 521; Carolina Portland Cement Co. v. Columbia Imp. Co., 3 Ga. App. 483, 60 S. E. 279; Hagan v. Rawle, 143 Ill. App. 543; Pulaski Stave Co. v. Miller's Creek Lumber Co., 138 Ky. 372, 128 S. W. 96; Lissberger v. Kellogg, 78 N. J. L. 85, 73 Atl. 67; Delafield v. J. K. Armsby Co., 131 N. Y. App. Div. 572, 116 N. Y. S. 71, affd. 199 N. Y. 518, 92 N. E. 1083; Meyer v. Rottenberg (Supr. Ct. App. Term.), 168 N. Y. S. 630; Chisholm &c. Mfg. Co. v. United States &c. Co., 111 Tenn. 202, 77 S. W. 1062; Sedro Veneer Co. . Kwapil, 62 Wash. 385, 113 Pac. 1100; Hubbard Steel Foundry Co. . Federal Bridge &c. Co., 169 Wis. 277, 171 N. W. 949. "Morgan & Wright v. Sultive Bros., 148 Iowa, 318, 126 N. W. 175; Collins v. A. Luban Co., 127 N. Y. S. 461; Booth v. Spuyten Duyvil R. M. Co., 60 N. Y. 487. But if the price was exceptional or extraordinary, such recovery is not allowable. Horne v. Midland Ry. Co., L. R. 8 C. P. 131. 39 Hammond v. Bussey, 20 Q. B. Div. 79; Jordan v. Patterson, 67 Conn. 473, 35 Atl. 521; Pulaski Stave Co. v. Miller's Creek Lumber Co., 138 Ky. 372, 128 S. W. 96; Sedro Veneer Co. v. Kwapil, 62 Wash. 385, 113 Pac. 1100. 40 D. A. Tompkins Co. v. Monticello C. O. Co., 153 Fed. 817; Van Winkle v. Wilkins, 81 Ga. 93, 7 S. E. 644, 12 Am. St. Rep. 299; Elzy v. Adams Express Co., 141 Ia. 407, 119 N. W. 705; Bates Machine Co. v. Norton Iron Works, 113 Ky. 372, 68 S. W. 423; Industrial Works v. Mitchell 114 Mich. 29, 72 N. W. 25; So for breach of a contract to deliver raw material or other goods, 41 or land or buildings known to be designed for a particular use, 42 or a telegram containing a message indicating by its contents not only that it is important, but the nature of the business to which it relates, 43 or to do work known to be Cleveland, etc., Co. v. Consumers' Carbon Co., 75 Ohio St. 153, 78 N. E. 1009; Standard Supply Co. v. Carter & Harris, 81 S. C. 181, 62 S. E. 150, 19 L. R. A. (N. S.) 155; Story Lumber Co. v. Southern Ry., 151 N. C. 23, 65 S. E. 460; Pender Lumber Co. v. Wilmington Iron Works, 130 N. C. 584, 41 S. E. 797. 41 Gee v. Lancashire, etc., Ry. Co., 6 H. & N. 211; Taber Lumber Co. v. O'Neal, 160 Fed. 596, 87 C. C. A. 498; Iowa Mfg. Co. v. B. F. Sturte vant Co., 162 Fed. 460, 89 C. C. A. 346, 18 L. R. A. (N. S.) 575; Pacific, etc., Works v. California Canneries Co., 164 Fed. 980, 91 C. C. A. 108; Ledgerwood v. Bushnell, 128 Ill. App. 555; Meyer v. Haven, 70 N. Y. App. Div. 529, 75 N. Y. S. 261; Lukens Iron & Steel Co. v. Hartmann-Greiling Co., 169 Wis. 350, 172 N. W. 894. In Hammer v. Schoenfelder, 47 Wis. 455, 2 N. W. 1129, damage for loss of meat was held recoverable for breach of a contract to deliver ice, the seller knowing the ice was needed to preserve meat. If damages were not foreseeable, they are not recoverable. Thomas Raby, Inc., v. Ward-Meehan Co., 261 Pa. 468, 104 Atl. 750. 42 O'Conner v. Nolan, 64 Ill. App. 357; Skinner v. Gibson, 86 Kans. 431, 121 Pac. 513; Neal v. Jefferson, 212 Mass. 517, 99 N. E. 334, 41 L. R. A. (N. S.) 387, Ann. Cas. 1913 D. 205. 43 Western Union Tel. Co. v. Graham, 1 Colo. 230, 9 Am. Rep. 136; McPeek v. Western Union Tel. Co., 107 Iowa, 356, 78 N. W. 63, 43 L. R. A. 214, 70 Am. St. Rep. 205; True v. International Tel. Co., 60 Me. 9, 11 Am. Rep. 156. In Stone & Co. "The plaintiff contends, however, that under the authority of a number of cases in several of the states, enough appeared in the messages in question to show that they related to business transactions between the plaintiff and the senders and that that is sufficient to charge the defendant with all the damages resulting from its negligence in transmission and delivery. Postal Telegraph Cable Co. v. Lathrop, 131 Ill. 575, 23 N. E. 583. The plaintiff claims that that circumstance would bring this case within the portion of the rule in Hadley v. Baxendale, which provides that if the special circumstances under which the contract was made were communicated to the defendant it would be liable for the extraordinary damages which might arise from a breach of the contract under those special circumstances. The weight of authority, however, and it seems to us the better reason is, that the knowledge merely that the messages are important or that they relate to a business transaction without information as to the exact nature and extent of that business transaction does not constitute such a disclosure of special circumstances as would render the defendant liable for unusual damages arising from a breach of the contract. Primrose v. Western Union Telegraph Co., 154 U. S. 1, 38 L. Ed. 883, 14 Sup. Ct. 1098; Wheelock v. Postal Telegraph Cable Co., 197 Mass. 119, 83 N. E. 313; Baldwin v. United States Telegraph needed for a purpose which will be defeated if the contract is broken.44 § 1348. Principle is applicable to partial breach. The principle is applicable to a partial as well as to a total breach. Thus the importance of performance exactly at the time agreed or with unusual promptness may be brought home to the defendant by notice which will make him liable for exceptional consequences of delay.45 If the action is against a carrier for breach of a contract of interstate carriage, the inquiry may be made whether the Interstate Commerce Acts will permit a carrier to subject itself to heavy consequential damages for the same rate as is fixed by its schedules for a contract of transportation without such damages. Certainly if liability to consequential damages can be regarded as based on a contractual agreement the assumption of extraordinary liability could not be allowed without special provision in the schedules.46 Not only profits prevented but losses sustained are within the rule. Losses which would not otherwise have been foreseeable as likely to happen if a contract was broken may be taken into consideration if in view of the circumstances of which the defendant had notice when he entered into the contract he might have anticipated them.47 Co., 45 N. Y. 744, 6 Am. Rep. 165; Candee v. Western Union Telegraph Co., 34 Wis. 471, 17 Am. Rep. 452; United States Telegraph Co. v. Gildersleve, 29 Md. 232, 96 Am. Dec. 519. "Spencer v. Hamilton, 113 N. C. 49, 18 S. E. 167, 37 Am. St. Rep. 611. "Iowa Mfg. Co. v. B. F. Sturtevant Co., 162 Fed. 460, 89 C. C. A. 346, 18 L. R. A. (N. S.) 575; Cobb, Blasdel & Co. v. Illinois Central Railroad Co., 38 Iowa, 601; Industrial Works v. Mitchell, 114 Mich. 29, 72 N. W. 25; Hayes v. Wabash R. Co., 163 Mich. 174, 128 N. W. 217, 31 L. R. A. (N. S.) 229; Wolfe v. Weir, 61 N. Y. Misc. 57, 112 N. Y. S. 1078; Waugh v. Gulf, C. & S. F. Ry. (Tex. Civ. App.), 131 S. W. 843. In HartParr Co. v. Barth Mfg. Co., 249 Fed. 629, 161 C. C. A. 539, there having been no prior notice such damages were denied. See supra, § 1073. 47 Iowa Mfg. Co. v. B. F. Sturtevant Co., 162 Fed. 460, 89 C. C. A. 346, 18 L. R. A. (N. S.) 575; Ramsey v. Capshaw, 71 Ark. 408, 75 S. W. 479; Nelson v. Wilson, 157 Ia. 80, 137 N. W. 1048; Feland v. Berry, 130 Ky. 328, 113 S. W. 425; Berghuis v. Schultz, 119 Minn. 87, 137 N. W. 201; Lissberger v. Kellogg, 78 N. J. L. 85. 73 Atl. 67; Mead v. Kalberg, 70 Wash. 517, 127 Pac. 185; Hammer v. Schoenfelder, 47 Wis. 455, 2 N. W. 1129. § 1349. Unilateral and bilateral contracts. Where a unilateral contract is broken, the only performance to be valued is that of the defendant promisor. The plaintiff ex hypothesi has already performed and is therefore entitled to the full value.of the defendant's performance. The situation is the same where the contract was originally bilateral but the plaintiff has fully performed his part. Where, however, a bilateral contract is wholly or partly unperformed by the plaintiff, a distinction must be taken between the usual case of a bilateral contract with dependent promises and the exceptional case of a bilateral contract with mutually independent promises. In the former case if there has been a total breach of contract, the value of the performance promised by the plaintiff and still unperformed by him must be deducted from the value of the performance still due from the defendant. In the exceptional case of independent promises the plaintiff's recovery will be governed by the same principles as if the defendant's promise was unilateral. There may indeed in such a case be a right of set-off, recoupment or counterclaim, but the law of damages will not adjust in an action by one party, the rights of both, except on the basis of setting off against one another two cross claims. § 1350. Rule of damages where promises are dependent. Where not only the promises but also the performances in a bilateral contract are intended as the exchange for one another, 48 it may be supposed (1) that the plaintiff's performance was to precede that of the defendant; (2) that the performances were concurrently due, or (3) that the plaintiff's promise was to follow the performance by the defendant. In neither of the first two cases supposed is there any difficulty in effecting by the measure of damages applied a cancellation of the mutual obligations of the parties. In the case first supposed if the plaintiff has already performed, the defendant's obligation became absolute and the measure of damages will be based on the full value of the performance due from the defendant. If the plaintiff has not performed but has been excused from performing, the value of the plaintiff's performance will be deducted 48 See supra, §§ 812 et seq. |