Can Damages Include Future Lost Profits?
Depending on the particular circumstances of a case, a party can include in their damage claim what would have been future profits had the breach not occurred. Usually referred to as future lost profits, these damages are sometimes difficult to ascertain, and only in certain circumstances do the courts allow such damages. What Is Needed to Establish Loss of Future Profits as Damages?First, it must be clearly demonstrated that future lost profits have been caused by the breach. Second, the alleged loss must be capable of being proven with reasonable certainty. Courts typically use the following guidelines to establish these criteria. - The damages may not be speculative, possible or imaginary, but must be reasonably certain and directly traceable to the breach
- The damages can’t be remote
- The damages can’t be the result of other unrelated causes
- There must be a showing that the particular damages were fairly within the contemplation of the parties to the contract at the time the contract was made
- If it’s a new business, a stricter standard is imposed, as it is more difficult to ascertain losses with certainty based on past performance
- The law doesn’t require that the estimate of future lost profits be mathematically precise, only that the damages be capable of measurement based upon known reliable factors. The courts here are looking to preclude undue speculation.
Should I Contact a Business Attorney?If you have been involved in a breach of contract, and the damages could involve the loss of future profits, you may find the advice of a business attorney to be extremely helpful. Because of the complex nature of contract law, the advice of a business attorney that specializes in contract breach may prove beneficial when assessing the strengths and weaknesses of your case. |
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