Freund v. Washington Square Press, Inc.

Facts

In 1965, Freund, an author and college teacher, signed a written contract with Washington Square Press, a publisher. Freund gave the publisher exclusive rights to publish and sell his work on modern drama in book form. The publisher agreed to pay a nonreturnable $2,000 advance when Freund delivered the manuscript. It could end the deal within 60 days of delivery if it found the manuscript unsuitable. Otherwise it had to publish a hardbound edition within 18 months, then a paperbound edition, and pay Freund royalties based on a percentage of sales. If it did not publish in time, the rights would revert to Freund, he would keep all payments already made, and his other remedies would stay open. Freund delivered the manuscript and received the $2,000. The publisher then merged with another publisher and stopped publishing in hardbound. It never used its right to terminate, yet it refused to publish the manuscript in any form. At trial, Freund tried to prove a delay in his academic promotion, lost royalties, and what it would cost him to publish the book himself.

Issues

1. Is the cost to the author of publishing the book himself the proper measure of damages when a publisher breaches a contract to publish his manuscript?
2. When the author cannot prove his lost royalties with reasonable certainty and shows no other compensable loss, what damages may he recover for the publisher's breach?

Holding

The cost of publication to the author was the wrong measure because it would put him in a far better position than full performance would have. His lost royalties were not proved with the required certainty, so he may recover nominal damages only.