GMTF, Inc. v. Scheidnagel

A-4287-97T5 (N.J. Super. App. Div. 1999) (Unpublished)
  • Opinion Date: April 5, 1999

CONTRACTS; DAMAGES—Where the usual measure of damages for a contract breach based upon the cost to cover is not available because replacement services cost less than the contracted services, an award of rescission damages is appropriate.

A consumer contracted with a caterer to hold a wedding at the caterer’s banquet hall. She was promised that no other affair would be catered at the same time as hers. At trial, the lower court found that the caterer deliberately failed to tell the prospective bride about another conflicting affair until very near the date of the scheduled wedding because the caterer thought the family would be unable to change its plans. For that reason, the lower court held that the caterer was guilty of consumer fraud and the bride was entitled to trebled damages. Although the usual measure of damages for a seller’s breach of a service contract is the difference between the contract price and cost of obtaining the service elsewhere, that measure of damage was not available in this case. Here, the cost of catering the wedding at another location was somewhat less than the price under the original caterer’s contract. Consequently, the lower court awarded rescission damages, that is, an amount necessary to put the bride in the same position as if she had never contracted with the original caterer. Those damages include repayment of the contract deposit and the cost of printing both new invitations and a different set of travel directions to a new location. The Appellate Division upheld the lower court’s choice of this form of damages and also its trebling of those damages under the Consumer Fraud Act.