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 damages clause).
  • The Vines sued for their deposit back.
    • 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 contract.
  • 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 Vines.
      • 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 non-performance?
    • 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 breached!