my take on acme : LUSENET : Lessig's Contracts : One Thread

my understanding of acme, in reply to the various messages, is that the plaintiff was asking the court to enforce the rule that he was entitled to the difference in price between the stated contract price and the market price the day of the breach. if we take as the day of the breach the day actually claimed by defendant, i.e. when he finished threshing, that stinks for the plaintiff, because the market price then was actually lower than the contract price.

Plaintiff thus argues that the contract was breached when defendant sold the wheat to the other ones, claiming that the wheat had been threshed by then and thus that was the date to be held for the delivery. Plaintiff considers the price of sale to that party to be the market price on that day, day of the breach, thereby becoming entitled to substantial damages. So the $1.16 is not claimed insofar as it was the price the defendant got, but because this was reflective of the market price. Had the sale been for a good with no market price... well, we know that story.

The court seems to have disfavored granting such damages, which would have been appropriate, i think, if that was indeed the date of the breach. so they decided to disallow this by not allowing plaintiff to file the amended reply, a neat little trick.

The appellate court seems to me to have gone a bit overboard in its disapproval of Acme, as i think is evidenced by this (quite inappropriate) inference as to what Plaintiff would have done under different circumstances:

"If appellee had sold his wheat on July 14th or 15th at $1.16, and the price on July 29th was $1.50 per bushel, appellant would not be contending that the measure of his damages was the difference between the contract price and the price appellee received for it on July 14 or 15, but would insist that he was entitled to the difference between the contract price and $1.50 per bushel..."


Any insight?


-- Anonymous, October 20, 1998


Andrea that was an incredibly helpful response. I feel much better!

To comment on the last part, maybe the court feels that setting the damages at the time of breach would get too tricky, because then it would have to start investigating contracts with third parties. Sticking with the day the breached contract was to have been performed is neater, in a sense, since the court's attention is already focused on that contract. Does this make sense? Am I making a point that's obvious? I can never tell!

-- Anonymous, October 21, 1998

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