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LOST PROFITS PROPERLY AWARDED FOR WRONGFUL TERMINATION OF SUBCONTRACT; CRITERIA EXPLAINED.

The Second Department determined plaintiff was entitled to lost profits as damages for the wrongful termination of a subcontract. Plaintiff had completed three of seven work items when the contract was terminated and, pursuant to the contract, would have been paid for the remaining four work items in a lump sum and would have been given additional paid work in the form of change orders. The measure of lost-profit damages for the unfinished work was the contractual lump sum minus plaintiff’s anticipated costs. The measure of lost-profit damages for the change orders were the relevant amounts paid to the subcontractor who replaced plaintiff:

 

“A party may not recover damages for lost profits unless they were within the contemplation of the parties at the time the contract was entered into and are capable of measurement with reasonable certainty. The rule that damages must be within the contemplation of the parties is a rule of foreseeability. The party breaching the contract is liable for those risks foreseen or which should have been foreseen at the time the contract was made” … . For damages to be “reasonably certain, does not require absolute certainty. Damages resulting from the loss of future profits are often an approximation. The law does not require that they be determined with mathematical precision. It requires only that damages be capable of measurement based upon known reliable factors without undue speculation” … . Inspectronic Corp. v Gottlieb Skanska, Inc., 2016 NY Slip Op 00155, 2nd Dept 1-13-16

 

CONTRACT LAW (LOST PROFITS PROPERLY AWARDED FOR WRONGFUL TERMINATION OF SUBCONTRACT)/DAMAGES (CONTRACT LAW, LOST PROFITS PROPERLY AWARDED FOR WRONGFUL TERMINATION OF SUBCONTRACT)/LOST PROFITS (PROPERLY AWARDED AS DAMAGES FOR WRONGFUL TERMINATION OF SUBCONTRACT)

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