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Lost profits must be proven with reasonable certainty. While exact precision is not required, it is plaintiff's burden to prove lost profits by evidence that provides a reasonable basis for assessing damages.
K & K Sand & Gravel, Inc. and Kurt and Shirley Kamminga (collectively, the “sellers”) agreed to sell a sand and gravel pit, together with plant equipment and mobile equipment to Continental Sand & Gravel Inc. ("Continental"). In the final agreement, the purchase price for the plant equipment was reduced and, to offset this, a consulting agreement was added under which Continental would pay the sellers for consulting services. Continental sued for breach of express warranties made by the sellers in a written agreement for the sale of certain real and personal property. The sellers counterclaimed for the balance due on a related consulting agreement.
Was the buyer entitled to lost profits?
The court found that even if it were established that the equipment met the trade definition of "good" at the time of sale this fact alone would not demonstrate that the warranties were not breached, where the district court determined that the warranties made were far broader. The court found that the cost of repair of the equipment was the proper standard for damages, regardless that the cost was greater than the purchase price. The court found that the buyer was not entitled to lost profits, where the evidence as to the amount of sand and gravel production conflicted and was not proven with reasonable certainty. The court found that the buyer remained fully responsible for the purchase price of the sellers' assets that included the consulting services, because the buyer did not seek to rescind the contract but, rather, sued for damages.