V.A.L. Floors, Inc. v. Westminster Cmtys., Inc. - 355 N.J. Super. 416, 810 A.2d 625 (Super. Ct. App. Div. 2002)

Rule:

New Jersey courts permit considerable speculation by the trier of fact as to damages. The rule relating to the uncertainty of damages applies to the uncertainty as to the fact of damage and not as to its amount, and where it is certain that damage has resulted, mere uncertainty as to the amount will not preclude the right of recovery. Although courts require a reasonably accurate and fair basis for the computation of alleged lost profits, the fact that a plaintiff may not be able to fix its damages with precision will not preclude recovery of damages. Loss of profits, where based on sound fact and not on mere opinion evidence without factual support, is recognized as a proper measure of damages if capable of being estimated with a reasonable degree of certainty. Profits lost by reason of breach of contract may be recovered if there are any criteria by which probable profits can be estimated with reasonable certainty. Past experience of an ongoing, successful business provides a reasonable basis for the computation of lost profits with a satisfactory degree of definiteness. 

Facts:

The customer solicited bids for a flooring installation and upgrade project in its development. The subcontractors and the customer entered into an oral agreement for the work and the subcontractors constructed a showroom containing samples of base grade items and the various upgrades available. Subsequently, the customer terminated its relationship with the subcontractors and the subcontractors instituted suit, for both out of pocket expenses and lost profits. The trial court granted summary judgment to the customer on the basis that the subcontractors' damages were too speculative. 

Issue:

Was a contractor's profit estimate based on its past experience a sufficiently definite basis upon which to submit a damage claim to the jury?

Answer:

Yes

Conclusion:

The court reversed and remanded for trial. The court held that the subcontractors' profit estimate based on its past experience was a sufficiently definite basis upon which to submit a damage claim to the jury. The subcontractors showed a reasonably accurate and fair basis for the computation of lost profits. A jury could have found that a contract existed between the parties and that the customer canceled the contract, thus breaching that contract. The subcontractors were thus permitted to have a jury assess the veracity of their claim and award such damages, if any, as were warranted.