P manufactured a furnace equipped with a special combination oil and gas burner. P wanted to show their new product at a trade show in NJ.
P wrote D and told them they had engaged a booth for exhibition purposes and that they needed the furnace to be there no later than October 8. D agreed to transport the furnace.
The shipment contained 21 packages. D failed to deliver one of the packages, the one containing the new innovation.
P sued D for breach, asked for reliance damages for expenses incurred for attempting to show the product in NJ.
Procedural History:
Trial court found for P, awarded damages for expenses.
MO COA affirmed, awarded damages for expenses.
Issues:
What kind of damages is an aggrieved party entitled to when damages from lost profits are impossible to calculate?
Holding/Rule:
If damages from lost profits are impossible to calculate, the aggrieved party may be entitled to recover reliance expenditures.
Reasoning:
The carrier had notice of peculiar circumstances under which the shipment was made (satisfies the Baxendale standard) and that delay in delivery would result in unusual losses by the shipper.
Under these circumstances, the injured party may recover expenses incurred in relying upon the contract, although such expenses would have been incurred had the contract not been breached.
Any attempt to reach a precise sum for damages would be guesswork. Thus, P is entitled to recover the expenses to which it had been put in order to secure the benefits of a contract of which D's conduct deprived it.
Unless P is permitted to recover the expenses that it went to, which were a total loss to it by reason of its inability to exhibit the furnace, it will be deprived of any substantial compensation for its loss. The law does not contemplate any such injustice.
