Meinrath v. Singer (New York, 1980)
Submitted by Boden Davidson on Wed, 2010-02-10 07:48
- [limitations on consequential damages] Meinrath was a marketer of computers and computer-related products, and had a contract with Singer under which he would receive goals-related bonuses for meeting certain threshold sales. There was consideration for the bonuses because they were tied to the performance of Meinrath under the contract. The problem is that Singer delayed the payment of the bonuses for sometime, and Meinrath claims that the delay of the receipt of his bonuses caused the failure of his other business – and also that he was entitled to interest on the payments as well. Private employers will give bonuses rather than locking it into a salary because the employee will not form an expectation in the bonus and the company can withhold the bonuses. The court says that there is a causation problem for Meinrath, because it cannot be shown that the failure of his other businesses was attributable to his non-receipt of the bonuses. Meinrath is entitled to the bonuses, but not much else – the consequential damages are far too speculative. [a good way to read the use of ‘bonus’ in this case is as actually commission, because it was tied into the agreement – but Meinrath telling Singer about the problems with his other businesses was not sufficient, it was not made explicit in the agreement that the bonuses were necessary for the continuance of his other businesses].
- should not have manipulated business for own good, but plaintiff might have gone too far as well.