Judith Koenig v. PurCo Fleet Services, 2012CO56 (September 10, 2012)

“I hit a deer.” Many people have a story that starts with those words. This one ends with a Supreme Court decision. A car rental company, whose car was damaged when the renter struck a deer, sought to recover from the renter its lost profits while the car was being repaired. It calculated that loss by using the “reasonable rental value” of the car. Under contract law, lost profits arising from the loss of use of personal property have to be proven by showing that actual profits were lost. But in this case, the Court applied tort principles. It held that the damage being remedied is the lost opportunity to derive a profit, not whether any profit was actually lost. In short, the opportunity cost is part of lost profit damages. So, lost profits can be measured with the “reasonable rental value” lost during repairs. The dissent would have applied contract law to the rental contract, not tort law.




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