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Supreme Court of California - 35 Cal. 2d 607
Tags: Contracts, Mitigation principle, Damages, Breach, Remedies
In the 1950 case, Bomberger v. McKelvey, the California Supreme Court ruled on a contract breach dispute involving building demolition and removal services. The plaintiffs, John Bomberger and others, won compensation from the trial court after the defendants, D.P. McKelvey and others, failed to pay $3,500 for the services. The defendants appealed, claiming no contract breach occurred and no damages or specific performance were owed.
The central issue was whether plaintiffs could receive damages or specific performance due to the defendants' contract violation. The court determined that plaintiffs could receive damages, but only equal to their actual profit loss caused by the defendants' non-payment. The reasoning was that damages are the typical remedy for contract breaches unless inadequate or impractical, while specific performance, an equitable remedy, is granted only when damages are insufficient and the contract is clear.
The court applied the "doctrine of substantial performance," meaning a party with minor defects in their contract performance can still enforce the contract. The case highlights how courts assess contracts involving building demolition and removal and apply damages and specific performance doctrines to avoid unjust gains or hardships from breaches. It demonstrates how courts balance the interests of both parties and aims to avoid unfair results. Bomberger v. McKelvey is an early California contract law case, with an opinion by Chief Justice Gibson.
The plaintiffs sued D.P. McKelvey for non-payment of demolition costs and for money promised to the Hills for surrendering their lease of the premises. A counterclaim and cross-complaint was filed against the plaintiffs and the Hills seeking damages for trespass and waste. The trial court erred in not making R.G. McKelvey a party defendant and in not making the Hills parties cross-defendant. The defendants breached the contract by forbidding plaintiffs to enter, but the plaintiffs were entitled to the full amount due under the agreement as they acted properly in performing their part of the contract. The denial of a preliminary injunction does not have a res judicata effect on the issues presented in subsequent litigation. Judgment was entered for plaintiffs in the sum of $6,000.
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