Bomberger v. McKelvey

Supreme Court of California · 1950 · Contracts

Contractsanticipatory breachstop-performance rulemitigation of damagesspecific performanceadequacy of damagesirrevocable licenselicense coupled with an interest

Facts

Defendants bought lots from plaintiffs on which the Hills operated under a lease, and the parties agreed the Hills would vacate when plaintiffs completed a new building for them elsewhere and that plaintiffs would remove the old building, with defendants paying plaintiffs $3,500 for demolition and the Hills $4,000 less rent for surrendering the lease. Plaintiffs told defendants they intended to use salvage from the old building, especially plate glass and skylights, in the new building, and in reliance on that arrangement changed the new building's plans to use those scarce materials. After delays in defendants' own project, defendants notified plaintiffs not to enter the property or dismantle the building, but plaintiffs later removed the needed glass and skylights, completed the Hills' new store, and then demolished and removed the old building. Defendants refused to pay either the demolition amount or the balance due for lease surrender and instead claimed trespass, waste, and forfeiture.

Issue

After defendants notified plaintiffs not to enter the land or continue performance, could plaintiffs nonetheless proceed to demolish and remove the building and recover the agreed contract price? Also, did plaintiffs' entry and demolition constitute trespass or make the Hills liable for waste so as to defeat recovery of the lease-surrender payment?

Rule

Although either party to an executory contract generally has power to stop the other party's performance by notice and accept liability for damages, the rule does not apply where the performing party is not interested solely in profit, damages would be difficult to ascertain and inadequate, and the party would be entitled to specific performance. When a contract implies a right to enter land to complete such specifically enforceable performance, the resulting license is coupled with an interest and is irrevocable for a reasonable time necessary to remove the property.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Sacramento, Nora Kim agreed to dismantle an obsolete greenhouse on land sold to Owen Pike for $8,000, and the agreement allowed Nora to keep the vintage steel trusses and specialty glass. Nora had already redesigned a separate conservatory she was building for a restaurant to incorporate those exact materials, which were unavailable locally for months. After closing, Owen sent written notice ordering Nora not to enter the property and not to proceed.

If Nora enters, dismantles the greenhouse within a reasonable time, and then sues for the $8,000 contract price, which is the best result?

Explanation. The majority recognized a general rule that a party may stop the other side's performance by notice and incur only damages. But it also recognized a narrow exception: if the performing party is not interested solely in profit, damages would be difficult to ascertain and inadequate, and specific performance would be proper, the performer may continue and recover on the basis of full performance. Here Nora needed the scarce materials to complete a separate project and equivalent materials were unavailable for months, so actual performance matters beyond profit. Under the majority's reasoning, the exception applies.