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Damages for Commercial Contract Breaches

In CR-RSC Tower I, LLC v. RSC Tower I, LLC, Maryland’s Court of Special Appeals has held that certain defendant landowners were not entitled, as part of an effort to minimize the damages awarded against them at trial of a lawsuit stemming from their breach of a land development contract, to introduce evidence that the real estate market suffered a severe downturn following the breach. In the Court’s view, such evidence was not admissible in the absence of proof that such a market “bust” was contemplated by the landowner and the plaintiff developer at the time they formed the contract. The holding effectively upholds a damage award that was based on profits projected by the developer at the time of contract formation.