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Freund v. Washington Square Press | 314 N.E.2d 419 (1974)

I’m going to sue you for everything you own!

We’ve all heard someone utter that phrase in anger or frustration. But as lawyers trying to calm a hotheaded client, we know that everything the defendant owns isn’t normally a valid measure of damages. The Court of Appeals of the State of New York explained the limits of contract damages in the 1974 case of Freund versus Washington Square Press.

Philip Freund, a drama teacher, wrote a book on modern drama. Washington Square Press agreed to publish and sell Freund’s book. Washington Square was to pay Freund a $2,000 advance upon receipt of his manuscript and royalties based on the number of copies sold. Washington Square retained the right to terminate the contract if it considered the manuscript unpublishable, but only within sixty days after receiving the manuscript.

Freund delivered the manuscript, and Washington Square paid the advance. But Washington Square then merged with another publisher and ceased publishing hardcover books. Washington Square didn’t exercise its termination option, but it refused to publish Freund’s book in any form.

Freund sued Washington Square for breach of contract. The trial court found that Washington Square had breached a valid contract. Freund then sought to recover damages for the delay in his academic promotion, lost royalties, and the anticipated cost of publishing the book himself. The trial court awarded Freund only the cost of publishing the book himself. Based on an expert’s testimony regarding the cost of self-publication, the court awarded Freund $10,000. A divided Appellate Division affirmed the damages award. Washington Square appealed to the New York Court of Appeals, the highest court in the state.

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