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Tour Costa Rica v. Country Walkers, Inc. - 171 Vt. 116, 758 A.2d 795 (2000)

Rule:

Expectation damages, which the jury awarded in this case, provide the plaintiff with an amount equal to the benefit of the parties' bargain. One potential component of expectation damages is loss of future profits. The purpose of expectation damages is to "put the non-breaching party in the same position it would have been [in] had the contract been fully performed."

Facts:

Defendants Country Walkers, Inc. (CW) and Robert Maynard (Maynard), and Plaintiff Tour Costa Rica (TCR) entered into a two-year exclusive agreement, for TCR to design, arrange, and lead customized walking tours for CW. Because TCR's limited resources were applied to CW and Maynard’s business, CW and Maynard were aware that TCR was required to stop advertising for other business and turned down other business opportunities. When CW breached the agreement, TCR suffered loss of deposits paid for scheduled tours, loss of profits it would have gained from these tours, damage to reputation for cancellation of scheduled travel and accommodations, and loss of potential business because of previous actions in ceasing to pursue other business.

Issue:

Were expectation damages appropriate to compensate TCR for harm it suffered?

Answer:

Yes

Conclusion:

The court found TCR's reliance on CW and Maynard’s promise detrimental. Expectation damages were appropriate to compensate TCR for harm it suffered, and the amount determined by the jury was not clearly erroneous. Because CW failed to object to the instruction allowing the jury to award expectation damages, CW and Maynard waived the right to appeal that issue.

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