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Contracts • Remedies for Unexcused Non-Performance
K#164
Legal Definition
Uncertain damages are not recoverable, and are usually a problem with cases involving new businesses.
When expectations are too speculative, use reliance damages.
When expectations are too speculative, use reliance damages.
Plain English Explanation
The courts don't like to deal with guessing what may have been possible if things went to plan. Rather, the courts want data and objective facts that they can use to either prove losses or at least reasonably project them. Damages that are too speculative are not recoverable.
Hypothetical
Hypo 1: Sam wants to open a new ice cream store. He wanted to time his grand opening with the first day of Summer, when most customers would be looking for a delicious, cold treat. In order to open on time, Sam needs an industrial freezer. Sam calls Bob, who sells freezers, and orders one with expedited shipping. Unfortunately, Bob was slow to ship out the freezer and it doesn't arrive under the third day of Summer. Sam watched thousands of people walk by his shop those 2 days without a freezer and, if each of them bought an ice cream, Sam would have made $2,000. Sam sues Bob for $2,000. Result: Sam's projections are too speculative. Sure, maybe all of the people he saw would have bought ice cream if they could, but maybe they were all lactose intolerant and would have ignored his store, or maybe only half of the people, etc. Without data to substantiate Sam's claim that he could have made that much money if not for Bob's breach, then a court will find them to be too uncertain, and thus unrecoverable.
Visual Aids
Related Concepts
How do you calculate damages in a breach of a construction contract?
How do you calculate damages in a breach of an employment contract?
How do you calculate damages in the breach of a sale of land contract?
Under the UCC, what formula is used to determine a buyer's damages if a seller breaches and has not tendered any goods?
Under the UCC, what formula is used to determine a buyer's damages if a seller breaches and the buyer keeps the goods?
Under the UCC, what formula is used to determine a seller's damages if a buyer breaches and the buyer keeps the goods?
Under the UCC, what formula is used to determine a seller's damages if a buyer breaches and the seller has not tendered any goods?
What are avoidable damages?
What are consequential damages and when are they recoverable?
What are expectation damages?
What are incidental damages and when are they recoverable?
What are reliance damages?
What are the monetary remedies for breach?
What are the non-monetary remedies for breach?
What is restitution?
What is specific performance?
When are covenants not to compete enforceable?
When are covenants not to compete enforceable in California?
When are liquidated damages appropriate?
When is specific performance unavailable as a remedy?
When may a buyer recover goods from a seller?
When may a seller reclaim goods from a buyer?
