Can I claim Loss of future earnings from a contract breach
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Can I claim Loss of future earnings from a contract breach
I am a small scale farmer involved in poultry farming. I sell eggs. I entered
into a loan contract with a bank. The bank would fund me to procure maize and
soya which are used for making chicken feed. The bank would disburse funds in
there phases. The bank only disbursed the first phase.
At the time that I was getting the loan, I procured additional chickens, but had
to disposed them since I was not able to feed them due to the fact that the
disbursements were not coming forth.
Can I claim loss of income which I would otherwise be getting from the disposed
chickens?
Asked on September 2, 2016 under Business Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
In theory yes, you can sue for loss of income in a case like this, though what you would really sue for is losse of the profit. For example--and apologies if this does not really make sense; I have no experience with poulty farming--say that it was 100 chickens. Say that lifetime, the egg production from the chickens would be worth $500 per chicken, but the average cost to keep them alive during that time (food; heat for their building; any medicine, etc.) would be $200 per chicken. If you disposed of the chickens, you did not have to pay their expenses, so you did not incure the $200/chicken cost. In this example, your loss is therefore $300 per chicken, or $30,000.
Say further that when you disposed of them, you sold them in a hurry at price of $5 per chicken to a large chinese restaurant. You received $500. That is an offset on your loss, so in this example, you could recover $29,500.
The hard part--and the reason I began this answer with "in theory"--is that you need to be able to prove the loss with evidence, to a reasonable certainty. If you are a new poultry farmer, this could be very hard--you lack data, a track record, etc. But if an experienced farmer doing this for years, you would then be in a good position to do this--you could show historical evidence that can suffessfully sell eggs and what you make per chicken over its laying life. If you can establish that to a sufficient certainty, you can establish this is a foreseeable or reasonably predictable loss from the bank's breach, which is what is necessary to hold them accountable for this loss.
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