Friday, March 23, 2012

Groves v. John Wunder Co. case brief

Groves v. John Wunder Co.; (Sup. Ct. of Minn., 1939); Supp 20; Notes 7
  • Facts: D leased piece of Groves’ land in order to excavate gravel. D promised in lease to “leave the property at a uniform grade.” At end of lease, D returned land without leveling it. Cost of restoration would have been $60k, but value of leveled land would have only been $12k (present value is zero).
  • Issue: should P’s expectancy damages be measured by the actual cost of restoration (cost of performance/completion: $60k) or by how much restoration would increase the value of the land (diminution of value: $12k)?
  • Holding: Majority gave cost of performance - $60k.
  • Rule: Depends how you look at the facts. Did P intend to level the land to keep it, or just sell it? Majority thought he wanted to keep it, so he should get $60k, cost of remedying the defect. Dissent thought he was going to sell it, so he should get $12k – would put him in place he would have been in.
  • Damages: loss of performance/completion. $60k.
  • Dissent: Thinks the majority is punishing Wunder. We want to protect people, when situations change, get out of their contract (while still making the other party whole) – efficient breach
  • Commentary: What happened here? The Great Depression! K was worth more to D at time of signing than at time of breach. Price of gravel dropped.

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