Rockingham County v. Luten Bridge Co.
35 F.2d 301 (4th Cir. 1929)
A county that cancelled a bridge to nowhere, and a builder who kept building
- In one lineEn una línea
- After the other party repudiates, the injured party may not continue performing to increase damages; recovery is limited to losses as of the repudiation plus the lost profit.Tras el repudio de la otra parte, el perjudicado no puede seguir ejecutando para aumentar los daños; recupera las pérdidas al momento del repudio más la ganancia perdida.
- RuleRegla
- A party injured by repudiation must not continue to perform in a way that increases the damages; damages are limited to those that could not have been avoided by stopping work, namely expenditures made before the repudiation plus the profit that performance would have earned (R.2d § 350).
- Why this case is herePor qué está aquí este caso
- The avoidability (mitigation) limit in Part VII (R.2d § 350): after a clear repudiation the injured party may not pile up damages by continuing to perform; it recovers what it had spent plus the profit it would have made, not the cost of work it chose to do afterward.
- Procedural posturePostura procesal
- The bridge company sued the county for the full contract price after completing a bridge the county had repudiated; judgment for the company; the Fourth Circuit reversed, limiting recovery to the loss as of the repudiation plus profit.
Facts
Rockingham County contracted with Luten Bridge to build a bridge as part of a planned road. After a political fight the board of commissioners resolved not to build the road and notified the company to stop work, when the company had spent about $1,900. The company kept building and finished the bridge, which stood in a forest with no road to it, and sued for about $18,300.
Procedural posture
Judgment for the company for the full amount; reversed, with directions to limit damages.
Issue
Whether the company could recover the cost of work done after the county repudiated.
Holding
No. Once notified, the company’s duty was to stop; it could recover the expenses incurred before the notice plus the profit it would have made, not the cost of completing an unwanted bridge.
Reasoning
Judge Parker stated the principle that a plaintiff cannot hold a defendant liable for damages that need not have been incurred, and that after an absolute repudiation the injured party must treat the contract as broken and sue, not perform and sue for the price.
Rule (own words)
When they tell you to stop, stop. You keep your profit and your costs to date; you do not get paid for building something nobody wants.
What-ifs
- The county’s notice came from an unauthorized official: no effective repudiation; the company could continue (the court actually had to resolve this).
- Stopping would have cost more than finishing (partly built structure that must be made safe): reasonable completion costs are not avoidable losses.
- Mexican comparison: the duty to mitigate is weak in Mexican law; a creditor who continues performing after a repudiation may still claim, which makes this rule a practical trap for Mexican lawyers in U.S. deals.
Likely follow-upsRepreguntas probables
Was the county's repudiation effective?
What could the company recover?
Why is this a limit and not a defense?
Say the answer out loud before revealing each part. Rate yourself honestly; the case comes back sooner when you miss.Di la respuesta en voz alta antes de revelar cada parte. Califícate con honestidad; el caso vuelve antes si fallas.
Panic kit: “Could you repeat the question, please?” · “Let me make sure I have the facts right: …” · “I'm not certain, but I'd argue … because …”Kit de pánico: “Could you repeat the question, please?” · “Let me make sure I have the facts right: …” · “I'm not certain, but I'd argue … because …”