Donovan v. Bachstadt
Supreme Court of New Jersey
91 N.J. 434, 453 A.2d 160 (1982)
The Donovans (plaintiffs) agreed to purchase property from Bachstadt (defendant) for $58,900. Bachstadt agreed to finance $44,000 of the purchase price through a purchase money mortgage. The interest rate for the purchase money mortgage was not to exceed 10.5%. The Donovans subsequently discovered that Bachstadt could not obtain good title to the property. The Donovans therefore purchased a different home and obtained a mortgage loan at a rate of 13.25%. They brought suit against Bachstadt, seeking compensatory and punitive damages. They specifically sought to recover their loss of the benefit of the bargain, which they calculated as the difference between the 10.5% and 13.25% interest rates. The trial court found that Bachstadt had breached the contract but denied recovery of the difference in interest rates. The Appellate Division reversed, finding that the difference in interest rates could form the basis of compensatory damages if the plaintiffs have entered a comparable transaction for other real estate or would likely do so in the immediate future.
Rule of Law
Holding and Reasoning (Schreiber, J.)
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