Breach of Contract Action After the Lessees Failed to Construct

Procedural Posture

Defendant lessees sought review of a judgment of the Superior Court of San Joaquin County (California) that granted damages to plaintiff lessor in a breach of contract action after the lessees failed to construct a levee as required and the lessor's entire tract of land was flooded.




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Overview

An agreement was formed between the parties where the lessor conveyed a certain tract of land to the lessees. In turn, the lessees were required to build a levee to prevent flooding of the lessor's whole tract. The lessees failed to complete the levees and the land was flooded. Accordingly, the trial court granted the lessor damages on account of crop loss by other tenants where the lessor was to receive rents from these crops. The lessees argued that the probable profit on crops not planted were too remote to be allowed in an action to recover damages for breach of contract for the construction of levees. The court reversed the trial court's order and judgment and ordered a new trial because the special circumstances regarding the lessees' responsibility for the destruction of the crops was not provided for in the contract. The court held that the measure of damages for the breach of contract to construct a levee was (1) if payment was made, the cost of constructing the work; (2) if payment was not made, the excess of the cost of the work over the contract price. Also, the leases between the lessor and the other tenants were executed after the breach of the lessees' contract.


Outcome

The court reversed the judgment and the order entered by the trial court for damages in favor of the lessor in his breach of contract action. The court further ordered a new trial.

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