## Facts

- An author and a publisher entered a written agreement granting the publisher exclusive rights to publish and sell the author’s book on modern drama.
- The publisher agreed to pay a nonreturnable $2,000 advance, partly due upon delivery of the manuscript, and to publish a hardbound edition within 18 months (followed by a paperbound edition).
- The contract allowed the publisher to terminate within 60 days after delivery if the manuscript was deemed unsuitable; if the publisher failed to publish within 18 months, rights reverted to the author, and prior payments remained the author’s “without prejudice to any other remedies.”
- The author delivered the manuscript and received the $2,000 advance.
- The publisher did not exercise its contractual termination option and refused to publish the manuscript in any form.
- The author sued for breach, initially seeking specific performance, and later sought damages including delayed academic promotion, lost royalties, and the cost to publish the book himself.

## Issues

1. What is the proper measure of damages for a publisher’s breach by failing to publish: cost of publication, expected royalties, or nominal damages?
2. Whether the author proved lost royalties with reasonable certainty sufficient to support substantial compensatory damages.
3. Whether awarding publication costs would improperly measure damages by the breaching party’s cost of performance rather than the promisee’s expected benefit.

## Decision

- The court held the publisher breached the agreement by failing to publish and by not invoking the contractual termination mechanism.
- The court ruled that the proper expectation measure was the author’s lost net royalties, not the cost to publish a hardbound edition.
- Because the author did not provide a reasonably certain basis to estimate royalties, the court reduced the award to nominal damages.
- The judgment was modified to award nominal damages of six cents, plus costs and disbursements.

## Legal Principles

- Contract damages aim to place the injured party in as good a position as if the contract had been performed, but not a better position.
- Recoverable damages are limited to the natural and probable consequences of the breach that were within the parties’ contemplation at contracting.
- Damages are measured by the value of performance to the promisee, not by the breaching party’s cost savings or cost of performance.
- Lost profits (including royalties) require a stable, non-speculative evidentiary basis; without reasonable certainty, only nominal damages are available.
- A remedy that exceeds the promisee’s contractual expectancy constitutes overcompensation and is not permitted.

## Conclusion

The court recognized a clear breach but limited recovery to nominal damages because the author’s expected royalties were the only proper expectancy measure and were not proven with reasonable certainty; awarding publication costs would have exceeded the author’s contractual benefit.


Freund v. Wash. Square Press, Inc., 34 N.Y.2d 379, 314 N.E.2d 419 (1974)