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Wilson v. Hays | 544 S.W.2d 833(1976)

Generally, consequential damages are damages that arise from a breach of contract due to circumstances that are peculiar to the injured party. To recover consequential damages, the injured party must prove that the breaching party could’ve foreseen the special type of damages that the injured party suffered at the time of contracting. In Wilson versus Hays, the Texas Court of Civil Appeals considered whether an injured party must also prove that he attempted to mitigate his damages before recovering consequential damages.

In March of nineteen seventy-two, Bobby Wilson was demolishing buildings in Midland, Texas. After learning about Wilson’s demolition work, W. D. Hays became interested in buying used and unclean bricks from him. Wilson and Hays then entered into an oral contract where Wilson agreed to sell and deliver to Hays six hundred thousand used and unclean bricks for one cent per brick. Hays agreed to pay Wilson the entire contract price of six thousand dollars in advance. Ultimately, though, Wilson only delivered four hundred thousand bricks to Hays.

Subsequently, Hays sued Wilson in state district court for breach of contract, seeking the return of the proportionate part of the price of the bricks he didn’t get, plus consequential damages. At trial, Hays didn’t present any evidence that he attempted to cover his losses by obtaining substitute goods or mitigating his damages. Hays also didn’t present any evidence of lost profits.

Following a jury trial, the court entered a judgment in favor of Hays for thirteen thousand six hundred forty-five dollars. This amount represented ten thousand dollars for nondelivery of the bricks, which was the market price at the time and place, plus three thousand six hundred forty-five dollars in lost profits. The lost profits represented the six thousand two hundred fifty dollars in profits Hays expected to receive from the full amount of the bricks, minus two thousand six-hundred five dollars Hays saved in expenses from Wilson’s failure to deliver the bricks. Wilson then appealed the damages award to the Texas Court of Civil Appeals.

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