American List Corp. v. U.S. News And World Report, Inc.

549 N.E.2d 1161 (1989)

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Nature of the Case

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Facts

D, in an attempt to expand its circulation by entering the college student market, negotiated an agreement with P whereby, for a 10-year period, P would compile and rent to D mailing lists of college student names. P had previously produced such mailing lists for high school, but not college, students. D agreed to finance P's start-up costs by paying a larger fee per name in the first five years of the arrangement. A schedule of the estimated number of names to be provided and the fees to be paid by defendant as well as the estimated losses and profits of plaintiff in each of the 10 years contemplated by the agreement was appended to the agreement. In addition, the agreement, which was drafted D, provided that 'D agreed to take as much as 25% more names than the estimated compilation at the cost per name shown in years one through five.' The agreement further provided for an annual review of the estimated figures for the purpose of adjusting the cost per name to be charged to D. One year after the contract was signed, D was purchased by a new owner and the contract was cancelled in September 1985 although prior to that cancellation, D had accepted and paid for names provided by P for three mailings conducted over a one and one-half-year period. P sued for breach of contract. After a bench trial, Supreme Court found D liable and awarded damages of $1,449,344 for the breach, which sum constituted the balance due P on the contract for the years 1985 to 1994, as reduced to present value. In assessing the present value of the money due P under the 10-year contract, the court used a 'realistic discount factor of 18%'. On the parties' cross-appeals, the Appellate Division affirmed, without opinion. Both parties appeal by leave of this court.