Vines v. Orchard Hill
181 Conn. 501, 435 A.2d 1022 (Conn. 1980)
Mr. and Mrs. Vines signed
contract to buy a condo in Orchard Hill. They paid a $7880 deposit (10%).
Mr. Vines' boss transferred to
New Jersey. They backed out of the contract.
A clause in the contract
said that the deposit was forfeit if the sale did not go through (a liquidated
The Vines sued for their
Vines argued that, due to an
increasing housing market, the house was now worth $80k more to Orchard
Hill since the Vines contract fell through. They argued that the 10%
estimate was not well thought out or reasonable.
Orchard Hill agreed that
everything the Vines said about the housing market was true. However,
just because the Vines made a bad deal and lost money, the law didn't
entitle them to weasel out of the deal.
The Trial Court found for the
Vines. Orchard Hill appealed.
The Trial Court found that
Orchard Hill had to give back the deposit, irregardless of the clause in
The Appellate Court reversed
and remanded it back to the Trial Court.
The Appellate Court found
that there was no loss to the non-breaching party (Orchard Hill). Based
on benefit of the bargain, there
is really nothing to recover. To not give the money back is to punish
The Court noted that Vines
partially performed, which should theoretically count more than someone
who doesn't perform at all.
The Vines were in a worse
off place that someone who completely breached and never made the down
payment. Should partial performance be punished more than complete
The Court found that was an efficient
breach. Both parties are better off
that the contract failed, so what's the problem?
If the damages were known
and $0, then why should a liquidated damages clause be in effect?
However, the Court believed
that Vines' argument that the price had gone up was not valid, because
the time to measure the seller's damages is at the time of the breach,
not the time after the breach occurred.
Therefore, it gets remanded
back to the Trial Court to determine exactly how much money the house
was worth at the time of the breach. If Orchard Hill did sustain some loss do to Vines' breach, and they are
entitled to recover for that amount.
The Court found that if
Vines was not happy with Orchard Hills claims that the deposit was equal
to their damages, it is Vines' responsibility to suggest what Orchard
Hills' actual loss was and compensate for that.
This case is interesting
because it shows that sometimes the breaching party (Vines) can sue for
recovery for a contract they