-
>> We now turn to the last
limitation on the recovery of
-
contract damages that we will
consider, reasonable certainty.
-
Reasonable certainty is generally viewed
as limitation on expectation damages.
-
It grows out of the basic principles
-
related to the burden of
proof in a civil case,
-
the requirement that a
plaintiff prove each element of
-
a claim for relief by a
preponderance of the evidence.
-
This burden applies with equal force
to a plaintiff's proving damages.
-
The plaintiff must prove to the
factfinder not only that she
-
was damaged as a result of the
defendant's breach of contract,
-
she must also prove the
extent of those damages,
-
giving the factfinder a basis for
determining the amount of her loss.
-
The requirement that the
injured party establish
-
the fact of damages and the
amount of those damages with
-
reasonable certainty is set forth in
-
Section 352 of the Restatement
Second of Contracts.
-
In general, once a party
establishes that it
-
was damages by the defendant's
breach of contract,
-
courts favor the injured
party by doing its
-
best to come up with a figure
for the amount of damages.
-
The law does not require
that the injured party
-
prove the amount of damages
with mathematical certainty.
-
This is made clear in
comment a to Section 352.
-
Appellate courts tend to uphold
jury awards of contract damages,
-
where the evidence was sufficient
to enable the factfinder to make
-
a fair and reasonable estimate
of the injured party's loss.
-
An interesting example of a court's not
requiring mathematical certainty with
-
respect to proving damages arose in
-
Bollea versus World
Championship Wrestling.
-
In that case, the wrestler known as
-
Hulk Hogan sued his former
employer for breach of
-
its contractual obligation to make
-
him a featured wrestler at
a major wrestling event.
-
Hulk Hogan sought damages for
diminished future earnings.
-
In other words, for his
loss of future profits.
-
In defending, the wrestling
promoter argued that
-
the wrestler's damage claim
was too vague and speculative.
-
The court disagreed.
-
It determined that based on his
long history of past earnings,
-
Hulk Hogan's evidence
was sufficient to enable
-
a jury to calculate the amount of
damages with reasonable certainty.
-
On the other hand, not every
plaintiff is as successful as
-
Hulk Hogan in attempting to prove loss
profit with reasonable certainty.
-
In Chicago Coliseum Club v Dempsey,
-
the plaintiff boxing promoter brought
in action against the famous boxer,
-
Jack Dempsey, for failing to fulfill
-
his contractual obligation to
engage in a scheduled boxing match.
-
Though the court found that
Dempsey breached the contract,
-
the court refused to award expectation
damages for lost profits of
-
$1,600,000 because they could not be
established with reasonable certainty.
-
The court stated,
-
the profits from a boxing contest of
-
this character open to the
public is dependent upon
-
so many different circumstances
that they are not
-
susceptible of definite
legal determination.
-
The success or failure
of such an undertaking
-
depends largely upon the
ability of the promoters,
-
the reputation of the contestants,
-
and the conditions of the weather at and
prior to the holding of the contest.
-
The accessibility of the place,
-
the extent of the publicity,
-
the possibility of other
encounter attractions,
-
and many other questions which
would enter into consideration.
-
Such an entertainment lacks
utterly the element of
-
stability which exists in
regular organized business.
-
The requirement of reasonable certainty
-
can cause great problems when a plaintiff
-
is seeking damages related to lost
future profits from a new business.
-
Unlike the Hulk Hogan case,
-
when profits from a new
business are an issue,
-
there exists no past track record on
-
which a court can base a
determination of future damages.
-
Nonetheless, if a new business owner has
-
undertaken market studies prior to opening
-
the business and can present evidence
of income and expense projections,
-
courts are more open to
making a finding that loss
-
future profits can be determined
with reasonable certainty.
-
If an injured party cannot
prove expectation damages with
-
reasonable certainty because the court
-
concludes that they are too speculative,
-
the disappointed plaintiff
is relegated to seeking
-
out-of-pocket reliance damages
or restitution damages,
-
generally an amount far less
than expectation damages.
-
Nonetheless, even in such cases,
-
reliance or restitution damages
-
must also be determined
with reasonable certainty.
-
Though this is often easier
as a matter of evidence.
