pjc-oil-and-gas-2022-lib

D AMAGES

PJC 313.21

Loss of contractual profit. Lost profits from collateral contracts are generally classified as consequential damages. Profits lost from the actual contract in question, however, are direct damages for the seller. Continental Holdings, Ltd. v. Leahy , 132 S.W.3d 471, 475 (Tex. App.—Eastland 2003, no pet.). Lost profit plus capital expenditures. If the plaintiff has incurred expenses in preparation or performance and reasonably expected to recoup that investment as well as make a profit, this lost profit plus capital expenditures may be an appropriate mea sure of damages. Houston Chronicle Publishing Co. v. McNair Trucklease, Inc. , 519 S.W.2d 924, 929–31 (Tex. App.—Houston [1st Dist.] 1975, writ ref’d n.r.e.). Reliance damages. The plaintiff may elect to recover expenditures made in preparation or performance instead of claiming lost benefit of the bargain or profit damages. If the plaintiff makes this election because he would have lost money had the contract been completed and the defendant proves the amount of loss avoided as a result of the breach, the jury should also be instructed to deduct those prospective losses from the reliance damages. Mistletoe Express Service v. Locke , 762 S.W.2d 637, 638–39 (Tex. App.—Texarkana 1988, no writ). Mitigation damages. Although normally raised defensively, the reasonable expenses of mitigating an economic loss are recoverable as actual damages for breach of contract. Hycel, Inc. v. Wittstruck , 690 S.W.2d 914, 924 (Tex. App.—Waco 1985, writ dism’d). Incidental damages. A variety of expenditures and other incidental damages may be recoverable as direct damages, depending on the particular facts and circum stances of each case. See, e.g., LaChance v. Hollenbeck , 695 S.W.2d 618, 621–22 (Tex. App.—Austin 1985, writ ref’d n.r.e.) (improvements to real property); Ander son Development Corp. v. Coastal States Crude Gathering Co. , 543 S.W.2d 402, 405 (Tex. App.—Houston [14th Dist.] 1976, writ ref’d n.r.e.) (additional salaries and expenses for equipment, maintenance, and supervision). Whether any particular inci dental damages are characterized as direct or consequential is, as discussed above, a question for the court. If a claimed expense is deemed consequential, it should be sub mitted as such, using the form in PJC 313.22. UCC cases. If the contract is for the sale of goods, the damages instructions should be drafted to incorporate the appropriate damages provisions in Tex. Bus. & Com. Code §§2.701–.724 (Tex. UCC). The following examples are illustrative only, using only a few damages provisions in the Uniform Commercial Code. Sample A—(§ 2.708) Seller’s damages for nonacceptance The difference between the market price of the goods at the time and place Paul Payne was to tender them to Don Davis and the unpaid contract price.

259