Measuring Breach of Contract Damages in Texas

Generally, the measure of damages for breach of contract is that which restores the injured party to the economic position he would have enjoyed if the contract had been performed. Sava Gumarska v. Advanced Polymer Sciences, Inc., 128 S.W.3d 304, 317 n.6 (Tex. App.-Dallas 2004, no pet.). This measure may include reasonably certain lost profits. See Cmty. Dev. Serv., Inc. v. Replacement Parts Mfg., Inc., 679 S.W.2d 721, 725 (Tex. App.-Houston [1st Dist.] 1984, no writ.) Lost profits are damages for the loss of net income to a business. Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). Lost profits may be in the form of direct damages, that is, profits lost on the contract itself, or in the form of consequential damages, such as profits lost on other contracts or relationships resulting from the breach. See Continental Holdings, Ltd. v. Leahy, 132 S.W.3d 471, 475 (Tex. App.-Eastland 2003, no pet.). But regardless of whether the lost profits are characterized as direct or consequential damages, the amount of the loss must be shown by competent evidence with reasonable certainty, be based on objective facts, figures, or data, and be predicated on one complete calculation. See Holt, 835 S.W.2d at 84. The injured party must do more than show that they suffered some lost profits. See Szczepanik v. First Southern Trust Co., 883 S.W.2d 648, 649 (Tex. 1994). Finally, consequential damages may not be recovered unless they are foreseeable and traceable to the wrongful act and result from it. See Stuart v. Bayless, 964 S.W.2d 920, 921 (Tex. 1998).

Source:

PAUL MOOD AND K&M DISTRIBUTORS v. KRONOS PRODUCTS, INC.; from Dallas County; 5th district (05-06-00111-CV, 254 SW3d 8, 11-28-07, pet. denied Jun 2008)

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K%26M%20Distributors%20vs.%20Kronos%20Products%20-%20%20Lorenzana%20Law%20Firm.doc