>> 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.