DELTONA CORPORATION, APPELLANT,
v.
FINN MACHINERY COMPANY, APPELLEE
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Deltona Corporation leased heavy earth-moving equipment from Finn Machinery Company under a lease requiring return in the same condition as rented, less normal wear and tear. Deltona failed to return the machines in proper condition and was found liable for $17,371.92 in repair damages. Deltona appealed, arguing damages were limited by an option to purchase the equipment, but the court affirmed the judgment, holding that Deltona's option rights were forfeited by non-exercise.
The court held that the measure of damages is not limited by an option to purchase that the lessee failed to exercise. Deltona's option rights were forfeited because it did not exercise them within the time specified in the option agreement, and therefore damages were properly calculated based on the full cost of repairs necessary to comply with the lease's return condition requirement.
[1] A party who fails to exercise an option to purchase within the time specified in the option agreement forfeits any rights under that option.
[2] Damages for breach of a lease agreement are measured by the cost of repairs to restore the leased property to its condition at the time of the lease, less normal wear and…
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Join FLexlaw to unlock all legal intelligence“it is clear that the appellant as the optionee did not exercise its rights within the time specified under the option agreement, and therefore whatever option rights it had were lost”
Establishes that forfeiture of unexercised options prevents their use as a limitation on damages in breach of contract cases
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Join FLexlaw to unlock all legal intelligenceDeltona rented four heavy earth-moving machines from Finn Machinery under a lease agreement requiring return in the same condition as rented, less nor…
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HENDRY, Judge.
Appellant, defendant in the trial court, seeks review of a final judgment awarding to the appellee the sum of $17,371.92, plus costs, based upon the appellee’s complaint for breach of a lease agreement.
The parties entered into an agreement whereby the appellant rented four heavy earth-moving machines from the appellee.
The lease specifically provided that the machines would be returned by the lessee to the lessor in the same condition as they were in when rented, less normal wear and tear. The appellee filed this action alleging that the appellant failed to return the machines in the manner provided for in the agreement, and therefore it was required to make the repairs for which it had incurred damages.
In its answer and counterclaim and at trial, the appellant maintained that the parties had entered into a supplementary option agreement in which the appellee agreed to apply 90 per cent of the rental payment towards purchase of the machinery.
As its only point on appeal, the appellant attacks the measure of damages employed by the trial court, arguing that at the time it returned the machines to the appellee it only owed $6,000 in order to own the four machines outright.
Therefore, appellant asserts that the amount of damages as excessive wear and tear was limited at least by that figure, since it could have acquired ownership of the machinery simply by exercising its option.
Appellant relies on the elementary principle of contract law established in the famous English case of Hadley v. Baxendale, 9 Exch. 341 (1854) contending that the parties contemplated that any damages for repairs would be limited by the option to buy which was offered by the appellee to the appellant.
We cannot agree with this reasoning because it is clear that the appellant as the optionee did not exercise its rights within the time specified under the option agreement, and therefore whatever option rights it had were lost. Cf., Goodman v. Goodman, Fla.App.1973, 290 So. 2d 552, 555; Ratner v. Coral Television Corp., Fla.App. 1962, 139 So. 2d 437.
Accordingly, we hold that the trial court applied the correct measure of damages which was based on a breach of the following provision of the contract:
“Lessee shall be responsible for the operation and maintenance of the equipment until the expiration of the rental period, after which time he will return the equipment freight prepaid to the lessor’s place of business in Miami or equidistant point, in the same condition as when originally rented, less normal wear and tear.”
For the reasons stated, the judgment appealed is affirmed.
Affirmed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Goodman v. Goodman, 290 So. 2d 552 (Fla. 1st DCA 1973)
- Nat Ratner v. Coral Television Corp., 139 So. 2d 437 (Fla. 3d DCA 1962)