Evergreen Amusement Corp. v. Milstead

112 A.2d 901 (Md. 1955)

 

RULE:

Loss of profit is a definite element of damages in an action for breach of contract or in an action for harming an established business, which has been operating for a sufficient length of time to afford a basis of estimation with some degree of certainty as to the probable loss of profits. However, loss of profits from a business, which has not gone into operation may not be recovered because they are merely speculative and incapable of being ascertained with the requisite degree of certainty.

FACTS:

Appellant corporation sought review of the trial court's decision denying appellant's recovery of lost profits for the period of delay caused by appellee contractor. Appellant was held liable by the trial court to appellee for the balance due on a written contract for the clearing and grading of the site of the theater and certain extras, less the cost of completing a part of the work and damages for delay in completion, based on rental value of the theater property during the period of delay and out-of-pocket costs for that time. Appellant sought recovery of lost profits for the period of delay, which was disallowed by the trial court. The trial court denied appellant's recovery for lost profits for the period of delay because the amounts claimed to have been lost were too uncertain and speculative. The trial court also refused evidence proffered to support appellant's theory. On appeal, the court affirmed the trial court's judgment.

ISSUE:

Whether the trial court erred in basing the damages for delay in the completion of the site on fair rental value and the actual monetary losses incurred. 

ANSWER:

No.

CONCLUSION:

The court affirmed the trial court's judgment in favor of appellee contractor and the decision to disallow recovery of lost profits by appellant corporation because the trial court was right in basing the damages for delay in the completion of the site on fair rental value and the actual monetary losses incurred. The court found that the agreement to pay for the additional dirt was binding. Further, the court found that the trial court did not err in refusing proffered evidence and in basing the damages for delay in the completion of the site on fair rental value and the actual monetary losses incurred.

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