Summary. A plaintiff can prove every element of liability and still walk out with nothing. Damages is a separate element with its own rules of proof, and the rule that kills more cases than any other is reasonable certainty. This article explains how courts separate the fact of damage from its amount, why Hadley v. Baxendale still decides consequential damages fights, how mitigation changes the arithmetic, what a damages expert must do to survive exclusion, and where the constitutional ceiling on punitive damages sits.

There is a particular kind of loss that lawyers remember for years. The jury finds for your client on liability. The judge has already denied the other side's dispositive motions. Everyone in the room agrees the defendant did the thing. And then the verdict form comes back with a number that is a fraction of what the case was worth, or worse, with the word nominal and the figure $1.00.

That outcome is almost never an accident and almost never the jury's fault. It is the predictable consequence of treating damages as the part of the case you do at the end, after the interesting work is done. Damages is not the epilogue. In most causes of action it is a separate element with its own burden of proof, and it has a body of doctrine as demanding as anything on the liability side.

This article is about that doctrine — and, more usefully, about how to build a damages case that survives contact with a motion to exclude, a directed verdict motion, and a skeptical juror who has never seen a discounted cash flow model.

Part I: Damages is an element, and it fails independently

Start with the structural point, because everything else follows from it.

In a negligence case the elements are duty, breach, causation, and damages. In a breach of contract case they are formation, performance by the plaintiff, breach, and damages. The plaintiff bears the burden on each. A failure of proof on damages is a failure of proof on the claim.

Two consequences follow, and both surprise people.

First, a defendant can win on damages alone. A motion for summary judgment that says "assume every fact plaintiff alleges — plaintiff still cannot prove damages with reasonable certainty" is a complete motion. It does not require the defendant to contest liability at all. Defense lawyers who default to attacking liability sometimes overlook that the shorter path runs through the damages expert.

Second, nominal damages exist precisely because the element can fail while the wrong is real. Where a legal right has been invaded but no actual loss is proved, courts award a nominal sum to vindicate the right. The Supreme Court explained the logic in the civil rights context in Carey v. Piphus, 435 U.S. 247 (1978), holding that students denied procedural due process were entitled to nominal damages absent proof of actual injury, and reinforced it in Memphis Community School District v. Stachura, 477 U.S. 299 (1986), which held that a jury may not award damages based on the abstract value of a constitutional right. You get paid for injury, not for importance.

Part II: Three ways to measure a contract loss

Contract damages come in three flavors, and choosing among them is a strategic decision, not a formality.

Expectation damages put the plaintiff where performance would have put them. This is the default. It equals the value of the promised performance, minus what the plaintiff saved by not having to perform, plus incidental and consequential losses, minus losses reasonably avoidable.

A caterer contracts to supply a wedding for $40,000. The client cancels three days out. The caterer had $23,000 in food, staff, and rental costs still to incur, and salvages $2,000 of already-purchased inventory by using it elsewhere. Expectation damages are $40,000 − $23,000 − $2,000 = $15,000. Not $40,000. The contract price is a starting point, never the answer.

Reliance damages put the plaintiff where they were before the contract — out-of-pocket expenditures made in reliance on the promise. This is the fallback when expectation is too speculative. If the caterer above were a brand-new business whose profit margin could not be established, reliance would still let it recover the non-salvageable food and the deposit it paid a rental company.

Restitution measures the defendant's gain, not the plaintiff's loss, and is available when a contract is unenforceable, has been rescinded, or where the defendant's breach was profitable enough that disgorgement is the only meaningful remedy. A contractor who completes 60% of a job and is wrongfully terminated may elect restitution for the reasonable value of work performed, which can exceed the pro-rated contract price on a losing contract.

The election matters. Expectation is usually the largest number, but it carries the heaviest proof burden. Plaintiffs who plead all three and develop evidence for all three preserve the ability to fall back when the expert on lost profits is excluded.

Part III: Reasonable certainty — the rule that decides the case

Here is the rule, and it has two halves that are constantly conflated:

The fact of damage must be proved with reasonable certainty. The amount need only be proved with enough evidence to permit a just and reasonable estimate.

The distinction is the single most important idea in this article. The Supreme Court laid it down in Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555 (1931):

"Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it would be a perversion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts."

And it repeated the point in Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251 (1946), where an antitrust plaintiff could show it had been injured by a conspiracy but could not reconstruct precisely what its revenues would have been in a market that never existed. The Court held that the jury may make a just and reasonable estimate based on relevant data, and that the defendant whose wrong created the uncertainty is not entitled to profit from it.

What this means operationally. Uncertainty about whether the plaintiff was hurt is fatal. Uncertainty about how much is tolerable, within limits. So the first job of a damages presentation is to nail down the fact of injury with evidence that is not itself an estimate: the lost customer who testifies she went elsewhere, the canceled purchase order, the loan called, the surgery performed, the wages not received. Build the fact of damage out of documents and witnesses. Then, and only then, ask the expert to size it.

Where certainty most often fails. The recurring problem area is lost profits for a business with no track record — historically the new business rule, which in its old form barred lost profit recovery for an unestablished venture outright. Most jurisdictions have abandoned the categorical bar and replaced it with a heightened evidentiary demand: a new business can recover lost profits if it proves them by evidence that is more than speculation. In practice that means comparable-business data, the plaintiff's own performance in analogous markets, signed contracts or letters of intent, industry benchmarks, or a pre-breach business plan prepared for a lender rather than for litigation. A projection prepared by the plaintiff's principal after suit was filed is worth close to nothing.

Part IV: Causation and foreseeability

Damages must be caused by the wrong, and in contract they must also have been foreseeable at the time of contracting. Those are two different filters, and evidence that clears one can fail the other.

The foreseeability rule is Hadley v. Baxendale (Ex. 1854) — the mill shaft sent for repair, the delayed carrier, the mill idle for days. The court held that recoverable damages are those arising naturally from the breach, or those that were in the contemplation of both parties at the time of contracting as the probable result of breach. Because the carrier was not told the mill would sit idle without the shaft, the lost profits were not recoverable.

That case is nearly two centuries old and it still decides modern disputes, because the modern version of the mill shaft is everywhere:

A logistics company is two days late delivering a component. The manufacturer's assembly line stops, and it loses a $2 million production run and a customer relationship worth far more. Were those losses "in the contemplation of both parties"? The answer usually turns on what the manufacturer told the carrier — and on whether the shipping contract contains a consequential damages waiver. In most commercial contracts, it does, which is why the drafting question and the damages question are the same question. See How Courts Read Contracts.

Tortious causation works differently. There, the tests are but-for causation plus proximate cause, and the foreseeability inquiry is about the type of harm and the class of persons at risk, not about what the parties discussed. A defendant takes the plaintiff as found — the eggshell skull rule — so an unforeseeable extent of injury is recoverable even though an unforeseeable kind of injury may not be.

Practical proof of causation. The most common failure is a plaintiff who proves a decline and assumes the defendant caused it. Revenue fell 30% after the breach; therefore the breach caused a 30% decline. That inference dies at the first cross-examination question about the recession, the retirement of the sales director, the entry of a new competitor, and the product recall. Serious damages work isolates the defendant's contribution: a but-for world constructed with a control group, a yardstick firm, a before-and-after regression that accounts for other variables, or a benchmark market untouched by the conduct.

Part V: Mitigation, and the arithmetic it forces

A plaintiff cannot recover losses it could have avoided by reasonable effort. This is usually called the duty to mitigate, though it is not a duty in the sense of being independently actionable — it is a limitation on recovery.

Three points that matter in practice:

  1. The burden is on the defendant. The plaintiff does not have to prove it mitigated; the defendant must prove that reasonable avoidable losses were not avoided, and must prove the amount.
  2. The standard is reasonableness, not optimality. A wrongfully terminated employee must look for comparable work, not any work; a seller of rejected goods must attempt a commercially reasonable resale, not the best resale imaginable. Hindsight second-guessing usually loses.
  3. Costs of mitigation are recoverable. If the plaintiff spends $40,000 covering with a substitute supplier at a higher price, that increased cost is the damage, and the expenses of arranging cover are recoverable too.

Worked example — cover under the UCC. A buyer contracts for 10,000 units at $12. The seller repudiates. The buyer covers within two weeks at $15 from another supplier, paying $3,000 in expedited freight it would not otherwise have paid, and avoids $1,200 in inspection costs it would have incurred under the original contract. Damages = (15 − 12) × 10,000 + 3,000 − 1,200 = $31,800. If instead the buyer sat on its hands for four months and then covered at $19 after prices spiked, expect a fight over whether the delay was reasonable — and expect the defendant to argue damages should be measured at the $15 market price available at the time of breach.

Part VI: Tort damages — the categories and how to prove them

Economic (special) damages are the ones with receipts:

  • Medical expenses. Past bills, and future care proved by a life care planner and a physician's testimony on future need. Watch the difference between amounts billed and amounts paid or accepted — states split sharply on which is recoverable, and it is often worth six figures.
  • Lost earnings and lost earning capacity. Past wages are arithmetic from pay records. Future earning capacity is an expert exercise: work-life expectancy, wage growth, fringe benefits, and reduction to present value.
  • Property damage. Repair cost or diminution in value, generally the lesser, with a stigma-damage argument in some jurisdictions.
  • Out-of-pocket costs. Household services, transportation, home modification, replacement labor.

Non-economic (general) damages — pain and suffering, disfigurement, loss of enjoyment of life, loss of consortium — have no receipt. They are proved through the plaintiff's testimony, treating providers, before-and-after witnesses (the coach, the coworker, the sister), and demonstrative evidence. Many jurisdictions bar the "per diem" argument that multiplies a daily figure by a life expectancy; nearly all bar counsel from suggesting the jury put itself in the plaintiff's place. Know your local rule before you plan the closing.

The single most effective non-economic damages technique is not rhetorical. It is a before-and-after witness who has no financial stake and who describes concrete, specific, mundane change: the man who no longer carries his own groceries, the woman who stopped going to the Thursday quilting group after eleven years. Juries discount adjectives and credit details.

Part VII: The damages expert

For any damages theory beyond simple arithmetic, an expert is not optional, and the expert is the most attackable part of the case.

The disclosure obligation. Federal Rule of Civil Procedure 26(a)(2) requires a retained expert to serve a written report containing a complete statement of all opinions and the basis and reasons for them, the facts or data considered, exhibits, qualifications, prior testimony, and compensation. An opinion not in the report is an opinion the expert usually may not give.

The admissibility standard. Federal Rule of Evidence 702, as amended, requires the proponent to demonstrate that it is more likely than not that the testimony rests on sufficient facts or data, is the product of reliable principles and methods, and that the expert's opinion reflects a reliable application of those methods to the facts. The gatekeeping framework comes from Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), extended to non-scientific expertise in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) — which is what makes it apply to accountants and economists. And General Electric Co. v. Joiner, 522 U.S. 136 (1997) supplies the sentence defense lawyers quote most: a court "may conclude that there is simply too great an analytical gap between the data and the opinion proffered."

Where damages experts actually get excluded. Rarely for lacking credentials. Almost always for one of these:

  • The model does not match the liability theory. This is the Comcast problem, from Comcast Corp. v. Behrend, 569 U.S. 27 (2013), where the plaintiffs' regression measured damages from four theories of antitrust impact but only one had been certified. The model must isolate the harm from the conduct actually at issue.
  • The expert assumed causation rather than accounting for alternative causes.
  • The inputs came entirely from the client, unverified — the "garbage in" problem. Rule 703 lets an expert rely on inadmissible facts only if experts in the field reasonably rely on such facts.
  • The methodology was invented for the case and has never been used to make a real business decision.
  • The expert cannot explain the model. If she cannot walk a juror through the discount rate she selected and why, she will not persuade one.

A defense checklist in one line: attack the fit, the inputs, the alternative causes, and the arithmetic — in that order.

Part VIII: Statutory damages

Some statutes remove the certainty problem entirely by legislating a number. Knowing which ones apply can transform a case.

  • Antitrust: 15 U.S.C. § 15 — threefold the damages sustained, plus costs and a reasonable attorney's fee.
  • Patent: 35 U.S.C. § 284 — damages adequate to compensate, in no event less than a reasonable royalty, with discretion to treble for willfulness.
  • Copyright: 17 U.S.C. § 504 — actual damages plus infringer's profits, or an election of statutory damages per work infringed, with an enhanced range for willfulness and a reduced floor for innocent infringement.
  • Trademark: 15 U.S.C. § 1117 — defendant's profits, plaintiff's damages, costs, trebling in the court's discretion, and statutory damages for counterfeiting.

A word of caution imported from the standing cases: a statutory violation is not automatically an injury for Article III purposes. TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) held that plaintiffs must show concrete harm, not merely a statutory violation, and that a risk of future harm does not by itself support damages. In a federal statutory damages case, plead and prove the concrete injury anyway.

Part IX: Punitive damages and the constitutional ceiling

Punitive damages punish and deter. They require a heightened state of mind — malice, fraud, oppression, or conscious disregard of a known risk — and in most states a heightened burden of proof, typically clear and convincing evidence.

The federal due process limits arrived in three cases worth knowing by name:

In maritime cases, Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) imposed a 1:1 punitive-to-compensatory ratio as a matter of federal maritime common law — not a constitutional holding, but frequently cited by defendants arguing for a low ratio elsewhere.

Layered on top are state statutory caps, bifurcation requirements, and in many states a share of the award payable to a state fund. Check the caps before you value the case.

Part X: Proving damages without an expert

Not every case can carry a $60,000 expert. Small and mid-size cases prove damages through documents and lay testimony, and the rules permit far more of this than people assume.

  • The owner's rule. In most jurisdictions the owner of property may testify to its value without qualification as an expert.
  • Business records under the hearsay exception carry invoices, ledgers, payroll, and inventory.
  • A lay witness with personal knowledge of a business may testify to its ordinary revenues and costs, and in federal court Rule 701 permits opinions rationally based on perception and not resting on specialized knowledge — the line courts draw is between a manager describing what the books show and an economist running a regression.
  • Summaries of voluminous records are admissible if the underlying records are made available.
  • Arithmetic done in front of the jury on a demonstrative — three columns, a subtotal, a total — beats a report nobody reads.

Worked example — a small commercial case with no expert. A landscaping company sues a developer for terminating a two-year maintenance contract after four months. Contract price: $8,500 per month. The owner testifies from payroll and supply records that direct costs to service the property ran $5,100 per month. He testifies that he redeployed one crew to a new client at $3,200 per month for the remaining twenty months. Damages: (8,500 − 5,100) × 20 = $68,000, less mitigation credit of the profit earned on the replacement work. He then puts the invoices, payroll summaries, and the new client's contract into evidence. No expert. No Daubert motion. A verdict that survives appeal.

Part XI: Building the damages case from day one

At intake. Ask what the injury cost, in dollars, and write the answer down. Ask what documents would show it. Ask who else knows.

In the complaint. Plead the categories — general, special, consequential, statutory, punitive — and plead any facts that establish foreseeability of consequential losses (what was communicated, and when).

In discovery. Request the defendant's financial records if profits or net worth matter; request the documents that establish the but-for world; and take a deposition of the person who ran the relationship, not just the executive who signed. On your own side, gather the contemporaneous documents before memories organize themselves around the litigation.

Expert timing. Retain the damages expert early enough to shape discovery, not after the close of fact discovery when the data she needs was never requested. This is the most common self-inflicted wound in commercial litigation.

Before trial. Draft the verdict form early. A verdict form with a single blank invites a compromise number; a form with itemized categories forces the jury to reason through each one and creates a record for post-trial motions.

Part XII: Frequently asked questions

Can I recover my attorney's fees as damages? Generally no, under the American Rule, unless a statute or contract shifts them. See Attorneys Fees and Costs.

Are emotional distress damages available in a contract case? Usually not, with narrow exceptions where the contract's subject matter makes serious emotional disturbance a particularly likely result — funeral services, for instance.

What is the difference between consequential and incidental damages? Incidental damages are the costs of dealing with the breach (inspection, storage, cover arrangements). Consequential damages are downstream losses caused by the breach (lost profits, lost customers). Contractual waivers frequently exclude the latter and preserve the former — read the clause closely.

Can a jury award more than the plaintiff asks for? In most jurisdictions, no — the ad damnum or the proof presented sets the ceiling. Check whether your jurisdiction still requires a specific sum in the prayer.

Are damages reduced to present value? Future economic losses, yes. Non-economic damages, generally no. The discount rate is a real fight, and a percentage point across thirty years is a large number.

What is a nominal damages award worth? One dollar — plus, sometimes, the leverage of prevailing-party status, though Farrar v. Hobby, 506 U.S. 103 (1992) held that a civil rights plaintiff who recovers only nominal damages is a prevailing party who should usually receive no fee at all.

Part XIII: For non-lawyers — what you should be doing right now

If something has gone wrong and you may have a claim, the single most valuable thing you can do is document the loss while it is happening.

  1. Keep a contemporaneous log. Dates, what happened, who you spoke with, what it cost you. A notebook entry from the week of the event is worth more than a perfect recollection two years later.
  2. Save everything. Invoices, estimates, texts, emails, photographs, bank statements, receipts for things you bought because of the problem.
  3. Get the numbers from before. Three years of tax returns, prior bank statements, past pay stubs, old invoices to the same customers. Your damages case is a comparison, and you need the "before" side of it.
  4. Do something reasonable to limit the harm — and keep the receipts for what it cost you to do so. Both halves matter.
  5. Do not exaggerate. A single provable overstatement contaminates every other number you present. Juries and judges forgive uncertainty far more readily than they forgive inflation.
  6. Ask about deadlines early. Statutes of limitations do not care how strong the damages proof is.

Part XIV: The measure of damages, by case type

The abstract rules resolve into concrete formulas that differ by claim. Knowing the measure before discovery tells you what to collect.

Claim Standard measure The fight
Breach of sales contract (buyer) Cover price minus contract price, or market price minus contract price, plus incidental and consequential, less expenses saved (UCC §§ 2-712, 2-713, 2-715) Whether cover was commercially reasonable and timely
Breach of sales contract (seller) Contract price minus resale price, or minus market price; lost volume seller recovers lost profit (UCC §§ 2-706, 2-708) Lost-volume status: could the seller have made both sales?
Breach of services contract Expectation: contract price less cost of completion; or reliance Overhead allocation — is it a saved cost or a fixed one?
Construction defect Cost of repair, or diminution in value where repair is disproportionate Economic waste; betterment credit for improvements
Wrongful termination Back pay, front pay or reinstatement, benefits, and where the statute allows, emotional distress Mitigation from replacement earnings; the front-pay period
Professional malpractice The "case within a case" — what the client would have recovered but for the error, discounted by collectibility Whether the underlying judgment was collectible at all
Fraud Out-of-pocket (what was paid less what was received) or benefit-of-the-bargain, depending on the state Which measure the jurisdiction allows; reliance
Conversion Fair market value at the time and place of conversion, plus loss of use Valuation date; special value to the owner
Trade secret misappropriation Actual loss plus unjust enrichment not captured by that loss, or a reasonable royalty Apportionment between protected and unprotected value
Insurance bad faith Policy benefits, consequential losses, sometimes the excess judgment, and punitive damages Whether the denial was merely wrong or unreasonable
Wrongful death / survival Pecuniary loss to survivors, loss of society, and (in a survival action) the decedent's own pre-death losses Which statute supplies which category; who may recover
Nuisance / trespass Permanent: diminution in value. Temporary: loss of use, discomfort, remediation cost Whether the harm is permanent or abatable

Two cross-cutting traps. The first is the collateral source rule — in most states, payments to the plaintiff from insurance, disability benefits, or a gratuitous provider are not credited against the defendant's liability, but statutes have carved that up in many jurisdictions, particularly in medical malpractice. The second is prejudgment interest, which is often available as of right on a liquidated sum and discretionary on an unliquidated one. On a $2 million claim litigated for four years, the interest question can be worth more than the argument you spent the most time on.

Part XV: Ten ways a damages case dies

  1. No fact of injury. The plaintiff proves a wrong and assumes a loss. Prove the loss with a document or a witness that is not an estimate.
  2. The model does not match the theory. Comcast. Ask of every expert model: does it isolate the harm from the specific conduct that is still in the case?
  3. The expert is retained too late to shape discovery, so the data she needs was never requested.
  4. Alternative causes unaddressed. The recession, the competitor, the departure, the recall. Address them affirmatively; do not wait for cross.
  5. Client-supplied inputs with no verification. Tie every input to a document produced in discovery.
  6. Overhead treated as a saved cost when it was fixed (or the reverse). This is the most common arithmetic error in commercial damages, and it moves the number by a lot.
  7. Mitigation ignored — a plaintiff who did nothing for eight months and cannot explain why.
  8. No pre-litigation projections. Projections built for the lawsuit are discounted; projections built for a bank, a board, or an insurer are credited.
  9. Punitive damages presented without the reprehensibility record. The ratio guidepost does the work only if reprehensibility is established first — duration, concealment, vulnerability of the victim, repetition.
  10. A verdict form with one blank. Itemize, or accept a compromise number you cannot challenge.

Part XVI: A lost profits calculation, start to finish

Abstract rules are easier to believe when you watch the arithmetic. Here is a complete lost profits model in the form a court will actually see.

The facts. Meridian Coatings supplies an industrial primer to a regional manufacturer under a five-year requirements contract signed in January 2022. In March 2024, with three years left to run, the manufacturer stops ordering and buys from a competitor in breach. Meridian sues.

Step 1 — Establish the fact of damage. Not with a model. With the purchase order history: 26 consecutive months of orders averaging 14,200 gallons per quarter, then zero. With the manufacturer's purchasing manager, deposed, conceding the plant kept running and kept buying primer from someone else. With the competitor's invoices, obtained by subpoena. Injury is now a documented fact, not an inference.

Step 2 — Build the but-for revenue line. Three years remaining × 4 quarters × 14,200 gallons = 170,400 gallons. Contract price was indexed to a published resin index; the expert applies the index's actual published values for the post-breach period rather than forecasting them, which removes an entire category of attack. Weighted average price: $18.40/gallon. But-for revenue: $3,135,360.

Step 3 — Subtract avoided costs, carefully. This is where cases are won and lost. The expert separates:

  • Variable costs actually avoided: resin, pigment, solvent, containers, freight, and the direct labor of the two operators Meridian laid off. From the general ledger, $11.05/gallon → $1,882,920 avoided.
  • Fixed costs not avoided: the plant lease, the depreciation on the mixing line, the plant manager's salary, insurance. These continued and are not subtracted, because they were not saved. The expert supports this with the 2024 and 2025 financial statements showing those line items unchanged.
  • Semi-variable costs: utilities and maintenance, allocated by a regression on the prior 26 months of production volume rather than by an assumption. $0.62/gallon → $105,648 avoided.

Incremental profit: $3,135,360 − $1,882,920 − $105,648 = $1,146,792.

Step 4 — Credit mitigation. Meridian redeployed capacity and won two smaller accounts it would not have had room for. The expert credits the incremental profit on that replacement business — $214,000 — and explains why the balance of Meridian's other business would have existed anyway. Volunteering the mitigation credit costs six figures and buys enormous credibility.

Running total: $932,792.

Step 5 — Address alternative causes. Meridian's overall revenue also fell because of an unrelated customer bankruptcy. The expert isolates the contract at issue rather than modeling firm-wide revenue, which makes the bankruptcy irrelevant to the calculation. That single design choice is what makes the model survive a Comcast-style attack.

Step 6 — Discount to present value. Future losses through 2027 are discounted at Meridian's actual weighted average cost of capital, supported by its bank's credit memorandum rather than by a textbook figure. Present value: approximately $874,000.

Step 7 — Add prejudgment interest on amounts already accrued, at the statutory rate, computed from the date each quarterly payment would have been due.

What the defense will do. Argue the requirements contract created no minimum obligation; challenge the 14,200-gallon baseline as drawn from an unusually strong period; argue the plant manager's salary was avoidable; attack the discount rate as too low; and offer its own expert with a firm-wide revenue model designed to make the customer bankruptcy do the explaining. Every one of those was anticipated in the design, which is the point. A damages model is not built to be right in the abstract. It is built to be right after someone spends three months trying to break it.

Primary authority

Related documents

This article is educational and not legal advice. Damages rules — caps, collateral source treatment, the recoverability of billed versus paid medical expenses, punitive damages standards, and the availability of lost profits for new businesses — vary substantially by state. Consult counsel in your jurisdiction.