Court rejects lost profits calculation for noncompete breach

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Abstract: Lost profits damages often pose problems because it’s difficult to calculate them with certainty. This is especially true when direct evidence isn’t available to establish the exact loss caused by a breach of contract. Under such circumstances, courts may allow lost profits to be measured on the basis of projected profits. But there are limits — as shown by this article, which cites one recent breach-of-contract case in which the defendants exposed a critical flaw in the plaintiff’s methodology. Arthur J. Gallagher & Co. v. Babcock, No. 11-30452, Dec. 18, 2012 (5th Cir.)