Freund v. Washington Square Press, Inc. – Case Brief Summary
Summary of Freund v. Washington Square Press, Inc., 34 N.Y.2d 379, 357 N.Y.S.2d 857, 314 N.E.2d 419 (N.Y. 1974).
Facts
Washington Square Press (D) contracted to publish a book written by Freund (P). The defendant agreed to pay a $2,000 advance plus royalties based on sales. The defendant had 60 days to terminate the agreement if it determined that the manuscript was unsuitable for publication; otherwise it was to publish a hardbound edition within 18 months followed by a paperback edition.
Freund delivered the manuscript and received the advance. Washington Square Press then merged with another publisher and refused to publish the book despite not having terminated the agreement within 60 days.
Freund sued for specific performance and sought to recover for damage to his career and lost royalties. The trial court denied the claims for specific performance and harm to his career but awarded the plaintiff $10,000 for the cost of publishing a hardback edition. The Appellate Division affirmed, holding that the remedy should be cost of completion just as it is in the case of a builder’s failure to complete a house. Washington Square Press appealed.
Issues
1) What is the proper measure of damages for breach of contract? 2) What must the plaintiff prove to recover damages for lost royalties?
Holding and Rule
1) Damages for breach of contract are awarded to compensate for injury caused by the breach that is foreseeable and reasonably within the contemplation of the parties at the time the contract was formed. 2) To recover damages the plaintiff need only show a stable foundation for a reasonable estimate of royalties he would have earned had defendant not breached.
The law awards damages for breach of contract to compensate for injury caused by breach. Such an injury must be foreseeable and reasonably within the contemplation of the parties at the time the contract was entered into.
The injured party should not recover more from the breach than he would have gained had the contract been fully performed. Measurement of damages in this case according the cost of publication to the plaintiff would confer more than he was entitled under the contract and would place him in far better position than he would be in had the defendant performed.
The consequence to Freund of Washington Square Press’s failure to publish is that he has not received the promised royalties. The cost of publication represents what it would have cost the defendant to confer the specific value of the right to receive royalties upon the plaintiff but that is not the proper measure of damages. There is no relation between the cost to publish and the payment of royalties.
Freund’s expectancy interest in the royalties, while theoretically compensable, was speculative. Had he shown reliance losses he would have been entitled to compensation. While he did have an expectation of notoriety, prestige and other benefits to be obtained from publication, he did not attempt to place a monetary value on them.
Plaintiff may recover nominal damages only as there was no proof of required certainty relating to the royalty damages and is therefore awarded six cents.
The analogy with respect to the construction contract is inapposite because in such cases an owner agrees to pay a builder and expects to receive a completed building in return. In this case the value to the plaintiff was a royalty based on of sales, not completed volumes of his book.
Disposition
Reversed.
See Dougherty v. Stepp for a law school torts case brief holding that a plaintiff in a claim for trespass is entitled to nominal damages even if there is no actual damage to the property.