Thursday, November 4, 2004
A supermarket developer who wasted time negotiating with "sellers" over a piece of property that was not, in fact, for sale, could not recover lost profits on the transaction, according to the Third Circuit. The developer negotiated with two members of a family about a piece of family-owned property. Discussions went on for three months before the developer learned that the family did not intend to sell the property and the two members had no authority to negotiate. The developer sued for breach of duty to negotiate in good faith, promissory estoppel, and fraud, and sought lost profits on the deal.
The court held that there was nothing to show that even had the parties negotiated in good faith, a final agreement necessarily would have been reached, and no guarantee that necessary zoning permits could be obtained. Lost profits were thus too speculative. Lost profits were not available on the fraud claim, either, because the measure of damages for fraud is actual loss, not the value of the lost bargain.
B&P Holdings I, LLC v. Grand Sasso Inc., 2004 U.S. App. LEXIS 20559 (Ct. App. 3d Cir. Sept. 30, 2004) (unpublished)