Peevyhouse v. Garland Coal case brief

Peevyhouse v. Garland Coal: p and D had mining agreement, work done except D failed to do promised remedial work, p sued for cost of performance of the work to be done.

·         Ct ruled: measure of damages is the reasonable cost of performance of the work when that work is the main purpose of the contract. But when the provision breached is incidental to main purpose and cost of performance and would be grossly disproportionate to economic benefit—then damages limited to diminished value rule: where the defect cannot be repaired without an expenditure disproportionate to the difference b/w the present value of the farm and what its value would have been if work had been done. In this case value to p of having contract performed was disprop. to cost of perf. The end value of having the work perfromed is used as the basis for damages.

a.       Idiosyncratic value of restored land?- might be worth more to indiv. then mkt value reflects, sentimental, aesthetic, family.  Ct only looks at relative econ. benefit in mkt terms- personal value hard to calculate, hard to prove that people actually had such attachments

b.       Recovery limited to dim. in val-- to recover substantially more than it's worth would give econ. benefit that would not have had if contract had been performed. Maybe negotiations would have taken different shape if coal co. was not to be responsible for clean up. P's could have gotten greater royalties, or an upfront fee.

c.       Dissent: breach was wilful and in bad faith, remedial work was intergral part of inducement to K, cost of remedial work was reasonably foreseeable, D reaped benefits w/o obligation, p entitled to spec. perf. or cost of perf., not cts role to change nature of C.

d.       Economically wasteful argument- tear down Hancock bldg. to put in different            moorings cost of performance is correct measure. See also Fox v. Webb—aesthetic value to owner then award cost of performance.