Gerwin v. Southeastern California Association of Seventh Day Adventists
Court of Appeal of California
14 Cal. App. 3d 209 (1971)
SCA (defendant) contracted to sell restaurant and bar equipment to Gerwin (plaintiff) but refused to deliver; Gerwin never purchased substitute equipment despite uncontradicted testimony that substitutes would cost $25,000 to $75,000, and instead sought specific performance plus lost anticipated profits for his restaurant and hotel business, presenting no evidence of comparable local business performance. SCA had accepted Gerwin's bid without knowing it was specifically contracting with him or of his particular business needs. The trial court awarded specific performance (or $15,000 in lieu of it) plus $20,000 in consequential damages for lost profits, and SCA appealed both awards.
Whether a buyer who does not cover his loss by purchasing substitute goods may recover consequential damages for losses he could not have covered, if the loss resulted from needs the seller had reason to know of at the time of contracting.