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American Mechanical Corp. v. Union Machine Co. of Lynn, Inc.

Massachusetts Appeals Court
485 N.E.2d 680 (1985)



American Mechanical Corporation (American) (plaintiff) contracted with Union Machine Company of Lynn, Inc. (Union) (defendant) to sell its real estate and business equipment for $135,000. At the time of the contract, Union had knowledge that American was in financial difficulty; that it was in arrears on its mortgage payments to Saugus Bank & Trust Company (Saugus); and that Saugus was urging American to sell its property and equipment. Union issued a $5,000 check to American as a down payment to be held in escrow until closing on the property. Thereafter, Union backed out of the contract and Saugus took possession of the property. After American was unable to find another purchaser for the real estate and equipment, Saugus sold the equipment for $35,000. Saugus foreclosed on the real estate and purchased it for $55,000. American filed suit against Union for breach of contract. After trial, the court held that although there was a breach of contract, American had not proved the right to recover damages, beyond nominal damages. American appealed.

Rule of Law


Holding and Reasoning (Fine, J.)

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