Kearsarge Computer, Inc. v. Acme Staple Co. (excerpt)

116 N.H. 705, 366 A.2d 467 (1976).

Dawson, p. 45-46


Facts: Kearsarge made a contract with Acme to provide data processing services for a year.  Acme terminated the contract halfway through the year, claiming unsatisfactory performance.  Kearsarge sued.  The trial court awarded the plaintiff the full balance of the contract price of the services.  Acme appealed on the basis that the damages should have been reduced by the amount the plaintiff saved due to the breach and the new business the plaintiff was able to gain since they didn’t have to service the defendant anymore.


Issue: Should the plaintiff collect the full contract price of the balance of the contract?


Rule: Damages should only be reduced by savings that a plaintiff can actually save.


Analysis: The court rules that there was no “substantial savings” for Kearsarge because it couldn’t reduce its costs on account of not doing work for Acme anymore.  Its operating costs were largely fixed.  The court also says that Kearsarge didn’t gain any business from not servicing Acme because data processing does not involve “unique personal services”, and so the business is expandable and can take on as many clients as it wants whether or not Acme is a client anymore in particular.


Conclusion: The court affirmed the trial court’s ruling.




If Luten had diverted its resources to building other bridges at the time of the repudiation of the contract, its damages ought to be equal to “the contribution toward fixed expenses that it would have received but for the breach”.  Thus, the damages ought to be the full contract price less any variable damages that were particular to the bridge that was not completed due to the breach.


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