Security Safety Corp. v. Kuznicki

350 Mass. 157 (1966)

213 N.E.2d 866

SECURITY SAFETY CORP. vs. EDMUND KUZNICKI & another.

Supreme Judicial Court of Massachusetts, Hampden.

January 5, 1966.

February 2, 1966.

Present: WILKINS, C.J., WHITTEMORE, CUTTER, KIRK, & REARDON, JJ.

Thomas J. O'Connor for the plaintiff.

Robert L. Hill for the defendants.

WILKINS, C.J.

The defendants, Edmund and Rachel Kuznicki, signed a written contract with the plaintiff for the installation of a fire detection system on their premises in Blandford for the sum of $498. Their cancellation presents the question of the validity of a provision that "In the event of cancellation of this agreement... the owner agrees to pay 33 1/3% of the contract price, as liquidated damages." The trial judge held that the provision was unreasonable and void as a penalty. He found for the plaintiff in the amount of $1, and reported the correctness of his finding to the Appellate Division, which dismissed the report. The plaintiff appealed.

The case was submitted on agreed facts. The contract was signed the evening of March 25, 1964. The defendants *158 made a deposit of $1 and agreed to pay the balance in "cash Sept. 15th." About nine o'clock on the morning following the signing of the contract the defendants cancelled "before the plaintiff did anything in respect to the work it was to perform."[1] "No evidence was agreed upon or offered as to the actual damage suffered by the plaintiff."

There was no error. The case is governed in all respects by A-Z Servicenter, Inc. v. Segall, 334 Mass. 672. For aught that appears, the damages in event of breach were not going to be difficult of ascertainment. See Restatement: Contracts, § 339; Williston, Contracts (3d ed.) § 776; Corbin, Contracts, § 1060, p. 350; 25 C.J.S., Damages, § 107, pp. 1048-1050. Time was lacking for an opportunity for the plaintiff to incur much expense of performance. The stipulated sum is unreasonably and grossly disproportionate to the real damages from the breach. In these circumstances, the aggrieved party will be awarded no more than his actual damage. Makletzova v. Diaghileff, 227 Mass. 100, 108. A-Z Servicenter, Inc. v. Segall, supra, 675. McCormick, Damages, § 148, p. 605. Macneil, Power of Contract and Agreed Remedies, 47 Cornell L.Q. 495, 502-503, 505. Compare the rule for the sale of goods in the Uniform Commercial Code. G.L.c. 106, § 2-718 (1).[2] Of actual damage there was no evidence.

Order dismissing report affirmed.

[1] The plaintiff denies that it agreed to this fact. The record, however, sheds no light on this contention.

[2] The record does not disclose whether this section applies.