Tongish v. Thomas

Tongish entered into a contract with Decatur Coop Association where he agreed to grow 160 acres of sunflower seeds, and the crop would be purchased by Coop at $13 per hundredweight for large seeds and $8 per hundredweight for small seeds. The crop was to be delivered in increments of one-third, and Coop’s only anticipated profit was a handling fee of 55 cents per hundredweight. Due to a short crop, the market price of the seeds was doubled and Tongish notified coop that he would not deliver any more sunflower seed.

Judgment for the plaintiff in the amount of $455.51, the computed loss of handling charges. Coop appealed to determine if awards should be the difference between the market price and the contract price.

Whether the buyer is entitled to its actual loss of profit or the difference between the market price and the contract price.

Judgment for the difference between the market price and the contract price.

Because Tongish breached the contract in bad faith with no valid reason, the market damages rule discourages the breach of contract and encourages a more efficient market.