P leased a jukebox to D for 2 years. P agreed to supply records and replace worn out parts.
Proceeds of the operation were to be shared on a specified basis, but with a minimum of $20/week to be paid to P by D.
D repudiated the contract before the equipment was installed. P leased this equipment somewhere else. P sued for damages.
Procedural History:
Lower court found for P, awarded $836 ($20/week for two years less the costs P would have paid had he performed the contract and depreciation).
NJ Superior Court affirmed, awarded $836.
Issues:
Is a lessor entitled to damages for breach of contract even if the lessor is able to lease the product to another party?
Holding/Rule:
Gains made by a lessor on a lease entered into after a breach are not to be deducted from his damages unless the breach enabled him to make the gains.
Reasoning:
Where a lessor agreed to lease an article of which the supply in the market is not limited, then the law would be depriving him of the benefit of his bargain if on the breach, it required his claim against the lessee to be reduced by the amount he actually did or reasonably could realize on a reletting of the article.
In case of the breach on the first lease, a lessor should have the benefit of both bargains and not be limited to the profit of the second of them.
Without the breach, the lessor could have bought another jukebox and leased it out to another party. Thus, he deserves the benefit of two bargains.
In the case of realty, however, the lessor could not properly lease it out to another person unless the first lease were broken. In such a case, the lessor should not be awarded two profits merely because of the first lessee's default.
