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Runyan v. Pacific Air Industries, Inc.

Supreme Court of California
466 P.2d 682 (1970)


Runyan (plaintiff) worked for Tidewater Oil Company. Runyan quit his job with Tidewater based on a contract he signed with Pacific Air Industries, Inc. (defendant), under which Runyan would own and operate a local Pacific franchise. Runyan paid Pacific $25,000 for the franchise. Pacific breached the terms of the franchise agreement by failing to properly maintain and supply Runyan’s local office. Runyan rescinded the contract and brought suit. The trial court awarded Runyan the $25,000 payment plus over $5,000 in consequential damages due to Runyan’s loss of income. These consequential damages were based on Runyan’s salary at Tidewater that he forewent when he signed the agreement with Pacific. Pacific appealed the award of consequential damages.

Rule of Law


Holding and Reasoning (Sullivan, J.)

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