Brief Fact Summary. Plaintiffs entered into a lease with Defendants to open a “book and bottle” shop in Defendants’ shopping center. When the leased space was ready for occupancy, Plaintiffs were refused their space because the lease had been misplaced, and the space had been rented to other tenants. Plaintiffs sued to recover anticipated lost profits.
Synopsis of Rule of Law. Where the evidence leads to a finding of anticipated profits within a reasonable degree of certainty, an award of damages may include lost profits.
Issue. Can lost profits be permitted as a measure of damages for breach of a lease?
Held. Yes. Profits have generally been disallowed as an element of damages not because they are profits but because they are speculative and uncertain. If the profits can be established with reasonable certainty, they may be considered an element of damages. In the case of a new business, precedent states that profits are often too uncertain for recovery. In the present case, however, the issue of profits was thoroughly tried, and the jury, being properly instructed concerning speculative damages, found that the evidence showed that Plaintiffs were entitled to damages of $200,000. The Appellate courts must not disturb such a finding.
If the business has not had such a history as to make it possible to prove with reasonable accuracy what its profits have been in fact, the profits prevented are often but not necessarily too uncertain for recovery.View Full Point of Law