§ 19-29 Contract - Damages - Lost Profits

• Library: South Carolina Requests to Charge - Civil (SCBar) (2016 Ed.)

§ 19-29 Contract - Damages - Lost Profits

"Profits" have been defined as the net pecuniary gain from a transaction, the gross pecuniary gains diminished by the cost of obtaining them. "Profits" are the net of income over expenditures during a given period. "Profits" refers to the gross proceeds of a business transaction less the costs of the transaction.

Lost profits are recoverable in an action for breach of contract. First, the profits must have been prevented or lost as a natural consequence of the breach of contract. Second, lost profits must reasonably be supposed to have been within the contemplation of the parties at the time the contract was made as a probable result of a breach of the contract.

When lost profits are contemplated as a measure of damages for breach of contract, they should be established with reasonable certainty since recovery cannot be had for profits which are conjectural or speculative. While proof with mathematical certainty is not required, the amount of damages cannot be left to conjecture, guess, or speculation. There must be a certain standard or fixed method by which the loss may be estimated with a fair degree of accuracy.

See Collins Holding Corp. v. Landrum, 360 S.C. 346, 601 S.E.2d 332 (2004); Drews Co. v. Ledwith-Wolfe Assocs., Inc., 296 S.C. 207, 371 S.E.2d 532 (1988)(profits lost by business as result of contractual breach have long been recognized as species of recoverable consequential damages; crucial requirement in lost profits determinations is the establishment of loss with reasonable certainty); Whisenant v. James Island Corp., 277 S.C. 10, 281 S.E.2d 794 (1981); South Carolina Fin. Corp. v. West Side Fin. Co., 236 S.C. 109, 113 S.E.2d 329 (1960)(profits that have been prevented or lost as natural consequence of breach are recoverable); Charles v. Texas Co., 199 S.C. 156, 18 S.E.2d 719 (1942)(profits lost as natural consequence of breach recoverable where it can be established they would reasonably have been realized but

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