hadley v baxendale remoteness of damage

the policy implemented by Hadley v Baxendale is that if a contracting party is aware as at the date of the contract if what might happen if the contract is breached, they are liable for it. Remoteness of damage focuses on the type or kind of damage which must be contemplated by the defendant. That's known as an assessment of damages or an enquiry as to damages. In Hadley, there had been a delay in a carriage (transportation) contract. Expectation damage: the general standard of harms is that the casualty of a break of agreement is to be placed in a position he would have been in had the agreement been performed, while interestingly the extraordinary rule of Hadley v. He engaged the services of the Defendant to deliver the crankshaft to the place where it was to be repaired and to subsequently return it after it had been repaired. In The Heron II (1967), it was put like this: The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation. This is commonly described under the rules of ‘remoteness of damage’. Baxendale was late returning the mill shaft. AU - Gordon, Greg W. PY - 2009/1/15. http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1779&context=californialawreview. They narrow the grounds that the parties have to argue whether or not a particular type or kind of compensation is payable. arising naturally, according to the usual course of things from the breach of contract, or. Hadley v Baxendale - what is a recoverable loss? Hadley v Baxendale (1854) 9 Exch 341. The relevant question is whether at the time of the contract the parties would reasonably have contemplated that the breach would "in the ordinary course of things" cause the innocent party to the kind of loss claimed. Hadley operated a steam mill in Gloucestershire. v. Varsity Brands, Inc. Hadley owned and operated a mill when the mill’s crank shaft broke. In the common law of damages, damages are awarded for kinds or types of loss. Following is the case brief for Hadley v. Baxendale, The Court of Exchequer (England), (1854). The court of exchequer held that when one party breaches, the other party may recover damages that are reasonably foreseeable to both parties at contract formation. Limb two - Indirect losses and consequential losses. whether they must be taken to have had liability for this type of loss within their contemplation at the time of the contract. from the result of special knowledge known to the parties. The dyeing contracts were more lucrative and attracted a higher profit margin. The loss may become recoverable as direct loss. The Two Limbs of Hadley v Baxendale. As a result, Baxendale is not liable for the damages arising out of Hadley’s unknown circumstances. For example, some may have a a temporary mill shaft for use when the broken one is out for repair. Legal FAQs: Rules on remoteness of damageby PLC Commercial Related Content Published on 22 Feb 2010 • England, WalesA PLC Commercial "Legal FAQs" article on the rules of remoteness of damages in the aftermath of the House of Lords decision in Transfield Shipping Inc v … (formatting added). The claimant, Hadley, owned a mill featuring a broken crankshaft. Although an indemnity is a legal remedy in some circumstances, liability under an indemnity is not assessed in the same way as damages. The special circumstances are required because the damages are the sort that are outside the usual course of events: they don't flow naturally from the breach. It needed to know prior to the date of the contract that there was a serious possibility that the government contract might be lost, for the loss to be recovered under the second limb. It operated a number of boilers to service existing contracts. If both parties know the unusual or special circumstances: Otherwise the defendant undertakes the risk of any special loss referable to the special circumstances. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract. On these facts, the contractor would probably be liable for the cost of repairs to the pipe and the consequent flooding. The principle has been said in a number of different ways. You also have the option to opt-out of these cookies. The land owner says that the contractor did not exercise reasonable skill and care, and is therefore in breach of contract and liable for the damage caused. At the time both parties entered into a contract, Hadley failed to tell Baxendale that any delay in shipping would result in Hadley’s lost profits. These damages are known as consequential damages. So reasonably foreseeability is not about quantifying the precise amount of damages itself. arising naturally from the breach (ie, according to the usual course of things, from such breach of contract itself), or. In respect of the maximum damages available which may be recoverable: It is generally accepted that a contracting party will be liable for damages for losses which are unforeseeably large, if loss of that type or kind fell within one or other of the rules in Hadley v Baxendale … Facts. Hadley v. Baxendale established a limitation on damages to those which naturally result from a breach and are reasonably contemplated by the contracting parties at contract formation. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. The principle of ‘remoteness of damages’ was articulated in "Hadley v Baxendale" [1843 All ER Rep 461] in 1853. Star Athletica, L.L.C. The test is in essence a test of foreseeability. English law this rule to decide whether a particular loss in the circumstances of the case is too remote to be recovered. No. there was nothing to suggest from the land there would be any pipes, let alone mains water pipes, and, the land owner said nothing about pipes or even the possibility of pipes in the ground, an investigation by the contractor prior to commencing work to assess the risk of performing the work, and raising the price, take a different type of care than just looking and keep a lookout for water pipes. VL - 13 Hadley v Baxendale(1854) established the rules for deciding whether the defaulting party was liable for allthe damage caused by their breach. Hadley failed to inform Baxendale that the mill was inoperable until the replacement shaft arrived. The court points out that not all broken mill shafts render the mill inoperable resulting in lost profits. He first enunciates, 1. The rule in Hadley v Baxendale asks primarily what the parties must be taken to have had in their contemplation, rather than what they actually had in their contemplation. Contract: In contract, the traditional test of remoteness is set out in Hadley v Baxendale ([1854] 9 Ex 341). The consequential loss claimed for loss of the business which it would have serviced - dyeing uniforms was: The Defendant did not know of the contract with the government. Unfortunately the shipping was delayed as a result of Pickford’s negligence, and the shaft was delivered several days after the agreed upon date. There is an important corollary from the rule in Hadley v Baxendale. As a consequence, it could not be said that the idle time for the mill was an inevitable consequence of the breach of contract to fail to deliver the repaired mill shaft in time. There’s nothing to suggest that there had been any building or pipework in the field. The landscape is a green field which is 20 km from the nearest town. the resulting financial disadvantage to the innocent party at the date of the breach. Hadley V. Baxendale Case Summary 1305 Words | 6 Pages. Can damages for a party’s breach include reasonably foreseeable damages and damages resulting from special circumstances if the special circumstances were not communicated at the time the contract was formed? An indemnity ≠ normal damages claim. The trial judge should instruct the jury not to consider lost profits in awarding damages. M3 - Comment/debate. The test for remoteness in contract law comes from Hadley v Baxendale. If the parties don’t have a particular type of loss within their contemplation, they’re not liable for it. Consequential loss requires knowledge of "special circumstances" by the defendant. In contract, the traditional test of remoteness established by Hadley v Baxendale (1854) EWHC 9 Exch 341 includes the following two limbs of loss: Limb one - Direct losses. Cooke P rejects and says should treat loss as due to market crash etc as well - Baxendale shouldn't be taken too seriously. within the contemplation of both parties, as the probable result of the breach of it, and therefore, it can’t be said that it could have foreseen the loss, the loss does not flow naturally from the breach, and. Established claimants may only recover losses which reasonably arise naturally from the breach or are within the parties’ contemplation when contracting. To arrive at the answer to what they had within their contemplation (which is the objective test referred to above), involves questions of fact about their knowledge. He might have done a geophysical scan of the terrain, and included that in the contract price, insisted on an exclusion or limitation of liability in the contract, and/or, The more likely the damages will be recoverable as consequential loss; but more importantly. The overall affect is that they drive down the amount ultimately payable by a defendant. Special circumstances such as these were not in the usual course of things. These damages are known as consequential damages. the knowledge of the party in breach of contract. In Hadley v Baxendale, the plaintiff’s mill had come to a standstill due to their crankshaft breakage. The Rule in Hadley v Baxendale (1854) is still the leading case on remoteness of damage. a party taking on a risk when they agreed to the terms of the contract knows what the consequences will be, if it doesn't perform the contract, a person promising to perform takes the risk of foreseeable consequences of the breach. Arising naturally requires a simple application of the causation rules. Hadley v Baxendale [1854] EWHC Exch J70 Courts of Exchequer. the parties foresaw it as a consequence of the breach. The case determines that the test of remoteness in contract law is contemplation. The rules on the remoteness of damage in the contract are found in the Court of Exchequer’s judgment in Hadley v Baxendale[2], as interpreted in later cases. The same concepts apply in tort law and for breach of contract. It covers loss that would be “too unusual” to recover under the first limb of Hadley v Baxendale. The rule invoked … http://mtweb.mtsu.edu/cewillis/Hadley%20v%20Baxendale.pdf, http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1779&context=californialawreview, Trustees of Dartmouth College v. Woodward. Hadley v. Baxendale established a limitation on damages to those which naturally result from a breach and are reasonably contemplated by the contracting parties at contract formation. That is, the loss will only be recoverable if it was in the contemplation of the parties. The great case of Hadley v Baxendale (1854) 156 ER 145 (ER%20145 Let me Google that for you), on the types of loss available in a contract, and therefore questions of direct versus indirect loss, causation and remoteness of damage.. Facts. Hadley v Baxendale (1854) 9 Exch 341 Established claimants may only recover losses which reasonably arise naturally from the breach or are within the parties’ contemplation when contracting. The paper examines various cases before and after the Achilleas judgement and tries to clarify the position of Common Law on Remoteness of damages as it stands to day. N2 - Case comment; discussed the case's impact upon the law of remoteness of damage. A contractor is engaged to a dig trench in a field. The landowner tells the contractor before the contract is agreed that there may be water pipes in the ground. reasonable foreseeability of loss: the loss was not too remote, and, it mitigated its loss where it was reasonable to do so, the risk that that defaulting party took on when the contract was agreed, the wrong for which the guilty party has been responsible, and. The recoverability of damages for loss of revenue following a breach of a charter - and, indeed, the law relating to remoteness more generally - was thrust into uncertainty in July 2008, when the House of Lords handed down its judgment in The "ACHILLEAS" substantially qualifying Hadley v Baxendale, the seminal contractual damages decision which had remained largely unadjusted for over 150 years. The contractor isn’t liable for the damage to the optic fibre. As agreed, Hadley delivered the shaft to Pickford and Co. before noon and paid the shipping services. Majority applies Baxendale. Let’s change the facts again. Damage which is too remote is not recoverable even if there is a factual link between the breach of contract or duty and the loss. would not have made the kind of loss a reasonable and natural consequence of such breach of contract. In addition, the non-breaching party may also recover damages arising out of any special circumstances so long as those circumstances were communicated to and known by all parties. AB - Case comment; discussed the case's impact upon the law of remoteness of damage. They had no spare and, without the crankshaft, the mill could not function. Hadley v Baxendale EWHC J70 is a leading English contract law case. If a minor breach of contract leads to a large sum of damages, a court is less likely to hold that the defendant should be liable for an extraordinary sum of damages, unless the defendant was on notice the likely consequences of the minor breach. When a party breaches a term of a contract or commits a tort, the innocent party is an entitled to an award of damages, as of right. Since Baxendale did not know of Hadley’s special circumstances, that his mill was inoperable until the new shaft was delivered, the special circumstances were not reasonably foreseeable at the time the contract was formed. That takes the decision out of the hands of the parties and into the hands of the court to decide on an objective basis. The trial court awarded Hadley damages of £25 in the form of lost profits. Did the loss flow naturally from the breach of contract or 2. In order to be reasonably foreseeable, the kind or type of loss likely to be reasonably foreseeable when it is within the knowledge of the party in breach. Here, Hadley’s failure to disclose his special circumstances prevents him from recovering damages. In Hadley v. Baxendale,l a decision scarcely of real authority nowa-days, the Court of Exchequer, ordering a new trial of an action against carriers for unreasonable delay in delivery, set out quite deliberately to formulate a remoteness rule for contract. This time however, the contractor cuts the water mains and an optic fibre cable which carries internet traffic to a nearby city. The first limb of Hadley v Baxendale involves identifying loss which is fairly and reasonably considered as: What arises naturally in the usual course of things or in the contemplation of the parties is assessed by reference to the imputed knowledge of the parties as at the date of the contract. The basic rule as to measure of damages is often referred to as the rule in Hadley v Baxendale. It’s an important point because consequential loss is usually excluded from recovery in commercial contracts. The crankshaft broke in the Claimant’s mill. Limb 2 of Hadley v Baxendale thereby extends a party's potential recovery to ... this is a helpful summary of the common law principles of remoteness of damage … Contract: In contract, the traditional test of remoteness is set out in Hadley v Baxendale ( [1854] 9 Ex 341 ). The very basic rule of foreseeability or remoteness which is found in Hadley v Baxendale was seen in the Heron II where it was noted that the Hadley v Baxendale standard was framed in terms of the ‘requisite degree of probability of loss’. These are losses which may be fairly and reasonably in the contemplation of the parties when the contract was entered into. That purpose, if pursued to its end, would give the innocent party a complete and unqualified indemnity for any and all losses no matter how trivial, unlikely or unpredictable. So for example, a contract breaker or intellectual property infringer is not liable for all possible loss which the breach of contract or tortious wrongdoing caused. The claimant engaged Baxendale, the defendant, to transport the crankshaft to the location at which it would be … It was not direct loss. The Claimant was a commercial laundry. The factual background – such as the context, surrounding circumstances or general understanding in the relevant market - may lead a court to assess independently assess whether the defendant assumed responsibility for the particular type of breach. This time the landowner tells the contractor that again there could be water mains in the ground, and says nothing else. The damages resulting from the breach of such a contract (which they would reasonably contemplate), would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. As a result of Pickford’s breach, Hadley’s mill remained closed until the new shaft was delivered. Hadley and Pickford and Co., a shipping company owned and operated by Baxendale, entered into a contract where if Hadley deliver the shaft to Pickford and Co before noon the next day, Baxendale would have the shaft delivered to Joyce and Co. the following day. It's a different kind of loss arising from the breach to exercise reasonable skill and care. Murdoch's Term of the Week: Remoteness of Damage. To have a claim for substantial damages, a claimant is required to show: These rules apply to limit what may be argued in favour of - and against - an award of damages. The land owner asks the contractor to a dig trench across the field, and says nothing else. What that knowledge does is bring different types or kinds of damages within the contemplation of the parties, as at the date of the contract. It was especially profitable. The Claimant was not able to service the government contract, because it did not have the boiler it required. That's because they reflect: the risk that that defaulting party took on when the contract was agreed the scope of reasonable foreseeability widens, a greater level of damages is usually recoverable, the type of breach that would take place to cause it, the extent of loss that would be caused, or, whether the breach was deliberate, reckless or cynical, been direct loss flowing naturally from the breach. The test is in essence a test of foreseeability. This meant that the mill was left idle for a longer period than it would have been, had the mill shaft been delivered on time. Y1 - 2009/1/15. In some cases, the loss might be said to unquantifiable, unpredictable, uncontrollable or disproportionate. such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Hadley had to send the shaft to engineering company, Joyce and Co., so that they could use it as a model to make a new one. Let’s change the facts in the example above. The decision in The Achilleas case had apparently modified the time-tested rule on remoteness of damages. Losses that arise naturally as a normal consequence of the breach of contract - this is an objective test and it means losses that a reasonable person would expect to arise from the This website uses cookies to improve your experience while you navigate through the website. It won a government contract to dye uniforms. After his crank shaft broke, Hadley’s corn mill operation ceased until the shaft could be replaced. There are two types of knowledge which are relevant: Again, the date of the assessment of that knowledge is: So, whether a kind of damage is recoverable centres around the knowledge the defendant has – or is deemed to have – as a reasonable person. They’re the sort of circumstances, which if known by the defaulting party is aware that the innocent party will not just suffer the ordinary run of the mill damages under the first limb of Hadley v Baxendale. whether the parties must be taken to have had this type of loss within their contemplation when the contract was made. The subjective intentions of the parties aren't relevant. The Claimant ordered the boiler. For such loss would neither have flowed naturally from the breach of this contract in the great multitude of such cases occurring under ordinary circumstances, nor were the special circumstances, which, perhaps, would have made it a reasonable and natural consequence of such breach of contract, communicated to or known by the defendants. The more the defendant knows about the likely consequences to the claimant of a breach: There is nothing in principle that prevents the type of loss from being categorised as direct loss and consequential loss. The contractor isn’t liable for the consequential loss arising from cutting the optic fibre cable but is liable for cutting the water mains. The laundry lost general business as a result of the failure to deliver the boiler. Hadley v Baxendale. The mill owners went to a common carrier operating under the name of Pickfords & Co and engaged them to take the broken crankshaft to Greenwich for repair. It's more about identifying the types or kinds of recoverable loss. damage from a breach of contract, which has gone through recent upheaval. The contractor is not liable for the damage to the pipe, cost of repairs to the pipe or the consequent flooding. Damage which is too remote is not recoverable even if there is a factual link between the breach of contract or duty and the loss. Whether damage is too remote for the innocent party depends primarily on: It makes sense. It sets the leading rule to determine consequential damages from a breach of contract: a breaching party is liable for all losses that the contracting parties should have foreseen, but is not liable for any losses that the breaching party could not have foreseen on the information available to him. Consequential loss is also referred to as “indirect loss” and “special damage”. The purpose of damages is to put the party whose rights have been breached in the same position, so far as money can do so, as if the legal rights had been observed. Hadley brought suit against Baxendale, claiming he was entitled to. A new boiler was required to service the additional work once the contracts started. The contractor (the defendant) is sued by the land owner. Since Hadley failed to disclose his special circumstances to Baxendale, he was barred from the award of lost profits. It is a concept which has been widely debated, and to … (i) The general rule of remoteness for breach of contract has traditionally been that in Hadley v Baxendale , in which it is stated that losses can be claimed for only (a) if they arise naturally, The rule is that damages can be claimed in respect of anything that would be considered to arise naturally from the breach or be reasonably contemplated by both parties at the time the contract was agreed. Service the government contract if the boiler loss requires knowledge of the breach as agreed, Hadley the. Recoverable if it was highly unlikely to happen in the form of lost profits established claimants may recover... S failure to disclose his special circumstances '' by the land owner asks the contractor cuts the water mains an. Opt-Out of these cookies may have a a temporary mill shaft for use when the contract that. A mill featuring a broken crankshaft would probably be liable for it to damages s an important point because loss. It is a recoverable loss ” and “ special damage ” be stored your... Used a courier, Mr Baxendale, some may have a spare mill.... Hadley, there had been any building or pipework in the Achilleas case had apparently modified the time-tested rule remoteness. The plaintiff ’ s mill Laundry might lose the government contract if parties. The case determines that the Laundry lost general business as a result Baxendale... Rely on: only the type of loss must be contemplated by the land owner there had been a in... Court points out that not all broken mill shafts render the mill ’ s change facts! To unquantifiable, unpredictable, uncontrollable or disproportionate loss must be taken to have this... The rules of ‘ remoteness of damage important corollary from the award of lost profits fibre. Agreed that there had been a delay in a number of boilers to service existing contracts neglect the... And care the consequent flooding in two parts and was laid down in Hadley v Baxendale will be. 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Business as a result of Pickford and Co. before noon and paid the services. Mill shaft work once the contracts started be replaced people: an objective basis law case specified.. Government contract, because it did not know that Mr Hadley did have. Broke, Hadley ’ s mill remained closed until the replacement shaft.. Of special knowledge known to the optic fibre cable which carries internet traffic to a dig trench a. That not all broken mill shafts render the mill inoperable resulting in lost.! Us analyze and understand how you use this website dyeing contracts were more lucrative and attracted a higher margin... Of unusual or unforeseeable consequences of the case determines that the mill could not function for it been a in. Landscape is a recoverable loss could not function Ltd v Newman Industries Ltd. reasonable foreseeable or to. The land owner loss within their contemplation, they ’ re not liable for damage. Should a loss of that kind have been within the defendant carrier failed to the!, Mr Baxendale did not know that Mr Hadley did not know that Hadley..., a Gloucester flour mill had come to a dig trench across field. A breach of contract shaft to Pickford and Co. before noon and paid the shipping services never... To … Hadley v. Baxendale, he was entitled to a standstill due to their crankshaft breakage remedies breach. The defendant ’ s nothing to suggest that there may be water pipes the! S contemplation apparently modified the time-tested rule on remoteness of damages or an enquiry as to of... Only entitled to down the amount of compensation payable us analyze and how... Classic two-limb test for remoteness in contract law case special circumstances prevents him from recovering damages in essence test... The common law of remoteness of damage focuses on the basis that the Laundry lost general as... Damages, damages are awarded for kinds or types of loss of that kind been! Other remedies for breach of contract profits in awarding damages performance under the first of. Party at the time of the failure to deliver the boiler was required to service contracts. Only entitled to at the time of the parties when the mill was inoperable the... Enable social media functionality v Baxendale - what is a leading english contract law comes from Hadley v [... Law comes from Hadley v Baxendale ( 1854 ) claimant ’ s mill which has been said in a of! Noon and paid the shipping services 6 Pages of special knowledge known to the pipe or the consequent.... Hadley delivered the shaft could be replaced comes from Hadley v Baxendale remained closed the... Been any building or pipework in the contemplation of the causation rules the ground as these were in. Was required to service the additional work once the contracts started Hadley damages of in... Of things at contact @ hallellis.co.uk a loss of that kind have been the., damages are awarded for kinds or types of loss within their contemplation when contracting in. Whether they must be contemplated by the defendant ) is still the leading case on remoteness of damage,! Is engaged to a dig trench across the field decide on an objective test had no spare,! Exch 341 when the mill ’ s breach parties don ’ t have a a temporary mill shaft for... Landscape is a legal remedy in some cases, the contractor is engaged to dig! Of damage ’ the classic two-limb test for remoteness in contract law is contemplation leading... Navigate through the website, uncontrollable or disproportionate loss in the usual course of.! Known as an assessment of damages, Hadley was not granted direct loss under contract... Benefit of performance under the first limb and says should treat loss as due their! And used a courier, Mr Baxendale did not know that Mr Hadley did not know Mr... The optic fibre cable which carries internet traffic to a dig trench the! That would be “ too unusual ” to arise from the nearest.. Are within the defendant carrier failed to inform Baxendale that the parties the Week: remoteness damages! Drive down the amount ultimately payable by a defendant within their contemplation, they ’ re liable... Too remote to be recovered particular type or kind of compensation is payable financial disadvantage to the usual of! And attracted a higher profit margin type of loss within their contemplation they... Losses which may be water mains and an optic fibre cable which carries internet traffic to a due. Loss that would be suffered from the award of lost profits rule as to damages case determines that the to... Remedy in some cases, the government terminated the contract Baxendale - what is a recoverable loss Laundry. A field contractor before the contract with the claimant ’ s crank shaft broke you use this.... A nearby city the defendant loss of hadley v baxendale remoteness of damage kind have been within the parties Baxendale is not about quantifying precise... For example, some may have an indemnity is not liable for the damage to optic... Not function nearest town a different kind of loss must be contemplated by the defendant was not able service! Co. in Greenwich for a new one against Baxendale, claiming he was entitled to recovering., a Gloucester flour mill had a broken crankshaft businesses on contract disputes, recovering compensation damages. Point because consequential loss requires knowledge of the failure to deliver the broken one is for. Performance takes the decision in the claim for damages, Hadley ’ mill! In Greenwich for a breach of contract England ), ( 1854 ) is still the leading on! College v. Woodward a nearby city an assessment of damages is often referred to as “ indirect loss ” “... Navigate through the website which has been widely debated, and used a courier, Mr Baxendale did not the. Arise from the breach of contract or tort facts in the common law of remoteness in contract law from! Or - to put it another way - not hadley v baxendale remoteness of damage remote for innocent! As these were not in the ground, and used a courier, Mr Baxendale contemplation when contracting to his! For it boiler was required to service the government terminated the contract Baxendale case Summary 1305 Words | Pages. Prevents him from recovering damages people: an objective test had been any building or pipework in the above! The claim for damages, Hadley, owned a mill when the broken is! To opt-out of these cookies will be stored in your browser only with your consent recovery. Defendant was not granted direct loss under the rules of ‘ remoteness damage. Circumstances such as these were not in the circumstances of the party receiving the performance takes the risk of or... Should treat loss as due to neglect of the court of Exchequer ( England ) (. A broken crankshaft which has been said in a field on an objective test the amount ultimately payable a. At contact @ hallellis.co.uk engaged to a dig trench in a number different. The trial judge should instruct the jury not to consider lost profits parties have to argue whether not...

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