Defendant air carrier appealed the decision from the Superior Court of the City and County of San Francisco (California), which entered judgment in favor of plaintiff freight forwarder in the freight forwarder’s suit for breach of contract. The air carrier challenged the contract, in part, as illusory and contested damages.
Nakase Law Firm is a civil defense attorney San Diego
Overview
The air carrier ceased shipping operations. On appeal, the court agreed with the trial court in part. The air carrier breached the contract. The parties mutually agreed that San Francisco would be the originating airport. There was no lack of mutuality in that respect. The fact that the contract was terminable by the freight shipper upon 30 days notice did not render the contract illusory. This was different than a contract that was terminable at will. The air carrier could not argue that the contract was month to month when it was bound by the theory of the case when it argued at trial and stipulated that there was but one contract. The freight forwarder should not have been awarded damages for expenses that it would have incurred had the business continued. The fact that damages could not have been ascertained with exactness did not render some of the damages award incorrect.
Outcome
The judgment for breach of contract against the air carrier was affirmed but modified. The contract was not illusory, and there was mutuality of obligation. The air carrier was bound by the theory of the case and could not argue on appeal that the contract was month to month. The freight forwarder was entitled to damages but the calculation was incorrect.
