By Coleman Jackson, Attorney & Counselor at Law
January 29, 2016
Lost Profits in a Texas breach of agreement case cannot be speculative; nor does an aggrieved party in Texas have to prove lost profits by exacting calculations or precise mathematical calibrations. In order to recover lost profits in a Texas breach of agreement case, Texas courts have repeatedly stated that an aggrieved party must bring forth sufficient competent evidence to give the trial jury the ability to determine the net amount of the lost profits with a reasonable degree of certainty.
Opinions and speculations by accountants, economists and others with respect to the amount of the lost profits are not sufficient. Expert opinions in Texas lost profit cases require that opinions, estimations and determinations of lost profits be based on objective facts, verifiable data and mathematical principles from which the net amount of lost profits can be reasonably ascertained.
Juries weigh the testimony, documents and other evidence and give it the credibility they deem appropriate. Therefore to the extent net profits are presented by competent, credible witnesses it improves the probability of an award of lost profits in a breach of agreement case. Furthermore, competent, credible corroborating evidence is essential in breach of agreement cases where the aggrieved party is seeking lost profits. Corroborating evidence is typically in the form of historical financial data which demonstrates past profitability; or futures contracts; such as, contracts that have already been executed which allows the computation of lost profits, or other credible hard evidence that the alleged lost profits are not merely speculations are absolutely necessary to prove lost profits in a Texas breach of agreement case.
Bottom line, when a Texas litigant is seeking lost profits in a breach of agreement case; they must not only plead lost profits, but also produce objective facts evidencing lost profits.
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