Hubbell Homes v. Key
Iowa Court of Appeals
786 N.W.2d 519 (2010)
Billy Michael Key (defendant) and his wife contracted to buy a new home for $376,900 from Hubbell Homes (plaintiff), taking advantage of a temporary employer rental allowance via a delayed closing and lease arrangement; when Key's job was eliminated, the couple refused to purchase the home. Hubbell relisted the home at the original price and, six months later, accepted a $350,000 offer (contingent on the buyer selling his own home, which never occurred, leaving Hubbell's home unsold). Hubbell sued for breach, seeking $36,137.50 in lost profits plus incidental damages; the trial court instead awarded $26,900 in general damages (the difference between the $376,900 contract price and the $350,000 fair market value) plus some incidental damages. Hubbell appealed.
Whether, under contract law, lost profits may be recovered from a defaulting party to a contract if the lost profits were contemplated by the defaulting party at the time the contract was made and the profits can be determined with reasonable certainty.