Opinion ID: 2174939
Heading Depth: 1
Heading Rank: 3

Heading: Timely Performance

Text: The contract between Blythe and Exton specified that time was of the essence and required Blythe to complete the grading and paving of the drive-in theater site within thirty-eight working days of the contract date. This provision as to timely performance gave Blythe notice that a delay in completion of the contract would delay the opening of the theater and result in losses for Exton. Losses caused by Blythe's failure to make timely performance were accordingly foreseeable. The Restatement of Contracts, § 346 (1932) provides as follows: (1) For a breach by one who has contracted to construct a specified product, the other party can get judgment for compensatory damages for all unavoidable harm that the builder had reason to foresee when the contract was made, less such part of the contract price as has not been paid and is not still payable, determined as follows . . . (b) For any delay in completion fairly chargeable to the builder, the plaintiff can get judgment for the value of the use of the product, if it was being constructed for use. We believe this rule is proper and sound. Cf. Lever v. Lagomarsino, 282 Pa. 110, 114, 127 Atl. 452 (1925). Its application in the present case would permit Exton to recover damages from Blythe for the difference between the losses caused by delay in the use of the theater and the unpaid balance of the contract price, provided only that Exton proved (a) a failure of timely performance, and (b) resulting damages which were sufficiently certain to permit recovery. From the evidence adduced at trial, we believe Exton did establish a failure of timely performance. Even adopting arguendo Blythe's definition of working day, viz., a day on which site and weather conditions were favorable, we are persuaded that the evidence supports the conclusion that there were more than thirty-eight such days between the date of the contract (April 11, 1956) and the date upon which Blythe himself contends the work under the contract was completed (August 29, 1956). We cannot agree, however, with appellant's contention that he proved attendant losses with sufficient certainty to permit recovery. This Court has held that a party seeking damages for breach of contract must be able to prove such damages with reasonable certainty. Wilcox v. Regester, 417 Pa. 475, 484, 207 A. 2d 817 (1965). See also Nakles v. Union Real Estate Co. of Pgh., 415 Pa. 407, 411, 204 A. 2d 50 (1964). Compensation for breach of contract cannot be justly refused because proof of the exact amount of loss is not produced . . . [T]he law does require . . . that the evidence shall with a fair degree of probability establish a basis for the assessment of damages. Massachusetts Bonding & Ins. Co. v. Johnston & Harder, Inc., 343 Pa. 270, 280, 22 A. 2d 709 (1941). This rule is in accord with the Restatement of Contracts, § 331 (1932), which specifies: (1) Damages are recoverable for losses caused or for profits and other gains prevented by the breach only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty. (2) Where the evidence does not afford a sufficient basis for a direct estimation of profits, but the breach is one that prevents the use and operation of property from which profits would have been made, damages may be measured by the rental value of the property or by interest on the value of the property. Considered in the light of these principles, we think it clear that appellant was not entitled to damages because of Blythe's belated performance. The evidence shows that Blythe's delay in completing the work did not delay the theater opening. Since the motion picture screen itself was not installed until a few days before the scheduled opening, the theater could not have opened sooner than it did. Exton contends, however, that because of the unfinished condition of the theater when it opened its revenues were less than they might have been; this loss of anticipated profits is the only damage claim attributable to delay. Under the circumstances of this case, we hold that the anticipated profits of a new and untried business which were attributable solely to the unfinished condition of the business premises were too speculative to provide a basis for an award of damages. Where a contractor's failure of timely performance delayed the opening of a drive-in theater, the Maryland Court of Appeals upheld a ruling by the trial judge which barred evidence tending to show the loss of anticipated profits. The Court cited § 331 of the Restatement, supra, and declared that such damages were too speculative to merit recovery. Evergreen Amusement Corp. v. Milstead, 206 Md. 610, 112 A. 2d 901 (1955). The damages in the present case are still more speculative, since the opening of the theater was not actually delayed. The speculative nature of the damages here alleged to have resulted from Blythe's failure of timely performance renders them unrecoverable. This failure of performance, therefore, did not give rise to any liability on the part of Blythe. Since the liability of the surety is no greater than [that of] its principal, East Crossroads Center, Inc. v. Mellon-Stuart Co., 416 Pa. 229, 231, 205 A. 2d 865 (1965), Home also had no liability under its performance bond because of this failure of timely performance. We hold that the trial court did not err in refusing to award damages to Exton on this ground.