F. Enterprises, Inc. v. Kentucky Fried Chicken Corp.

351 N.E.2d 121 (1976)

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Nature of the Case

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Facts

On January 20, 1968, Appellee entered into an option with H. Corporation to buy a parcel of real estate for the sum of $85,000. Negotiations between appellee and appellant resulted in a contract for a 20-year lease for $1,100 per month for about half the parcel. Appellees were to construct a building on the premises not to exceed $40,000 in cost with appellees having the option to require appellant to erect the building with appellant being reimbursed by appellees in a sum not to exceed $40,000. On August 12, 1968, appellant notified appellees that it would not enter into the lease. On November 18, 1968, appellees exercised their option for the whole tract. The fair market rental value of the 85-foot tract with a building was $9,025 per year and without improvements was $3,825 per year. The trial court gave a judgment for $28,508.89. Appellant appealed claiming that appellees were required to minimize their damages and because they were not required to exercise their option, that appellant’s liability for damages should be reduced by a deduction for interest income for 20 years on ½ of the purchase price of the entire tract. Appellant then asserts that over the 20-year period that such interest income is $51,000 and the interest income on the building was $48,000 and therefore appellees suffered no damages and should recover nothing but nominal damages.