Defendant seller sought review of a judgment of the Superior Court of Stanislaus County (California), which awarded damages to plaintiff buyer in an action for breach of contract regarding the sale and purchase of buttermilk.
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The buyer alleged that under the one-year contract, it was granted the exclusive option to purchase 20 carloads of the seller’s surplus buttermilk and that the seller breached the contract by refusing to furnish more than one carload. The court reversed judgment in favor of the buyer and remanded the action because the trial court erroneously adopted lost profits as the measure of damages. The court found that the contract was plainly one for the sale and purchase of certain quantities of buttermilk and that it did not contain any indication that the matter of profits to have been derived by the buyer from the sale of the buttermilk was a consideration or element of the contract. There was also no allegation or evidence that the buyer was unable to purchase the buttermilk in the open market. Thus, the proper measure of damages was that prescribed by Cal. Civ. Code §§ 3308, 3354, as the excess of the value of the property to the buyer over the amount that would have been due to the seller if the contract had been fulfilled as well as the price at which the buyer could have bought equivalent buttermilk in the open market.
The court reversed the judgment that awarded damages to the buyer and remanded its breach of contract action against the seller for further proceedings.