## Facts

- Model Vending, Inc. leased and placed merchandise vending machines.
- Frank Stanisci operated a bowling alley business known as “Clayton Lanes.”
- The parties executed a written contract on August 15, 1958 for a five-year term under which Model Vending would place machines at the bowling alley.
- The agreement granted Model Vending the exclusive right to place its machines and sell the specified merchandise at Stanisci’s location during the contract term.
- On or about July 28, 1959, Stanisci shut down Model Vending’s machines and began selling merchandise through other methods on the premises.
- On March 24, 1961, the bowling alley premises were completely destroyed by fire and were never reconstructed.
- Model Vending sought lost-profit damages for the entire contract term ending August 15, 1963.
- After a bench trial, the court limited lost-profit damages to the period from the breach until the fire.

## Issues

1. Whether destruction of the specified premises by fire, without the defendant’s fault, rendered further performance impossible and discharged liability for lost profits accruing after the fire.
2. Whether the defendant’s earlier breach required awarding lost-profit damages through the full contract term despite the subsequent impossibility.

## Decision

- The court held that the fire destroyed the subject matter necessary for performance and made further performance impossible.
- Because the fire was not attributable to the defendant’s fault, the defendant was not liable for lost profits accruing after the date of the fire.
- The court awarded lost-profit damages only for the interval from the defendant’s breach to the fire, not through the contract’s scheduled end date.

## Legal Principles

- When a contract’s performance depends on the continued existence of identified premises (or other specific subject matter), their destruction without the promisor’s fault renders performance impossible and discharges duties thereafter.
- Damages for breach are limited to losses caused by the breach; they do not extend to profits that could not have been earned because later, faultless events would have prevented performance.
- A prior breach does not extend a breaching party’s liability beyond the point at which performance would have been discharged by supervening impossibility.

## Conclusion

The court limited the plaintiff’s lost-profit recovery to the period before the premises were destroyed, reasoning that a faultless fire made further performance impossible and cut off damages after that date even though the defendant had breached earlier.


Model Vending, Inc. v. Stanisci, 180 A.2d 393 (N.J. Super. Ct. Law Div. 1962)