Jewell-Rung was a Canadian corporation that imported and
sold men’s clothing at wholesale. Haddad...

Question

Jewell-Rung was a Canadian corporation that imported and
sold men’s clothing at wholesale. Haddad was a New York corporation that
manufactured and sold men’s clothing under the ‘‘Lakeland’’ label. The
companies agreed that Haddad would sell 2,325 Lakeland garments to Jewell-Rung,
for $250,000. Jewell-Rung began to take orders for the garments from its
Canadian customers. Jewell-Rung had orders for about 372 garments when it
learned that Haddad planned to allow another company, Olympic, the exclusive
Canadian right to manufacture and sell Lakeland garments. Jewell-Rung sued
Haddad for its lost profits. Haddad moved for summary judgment, claiming that
Jewell-Rung could not recover lost profits because it had not ‘‘covered.’’ Is
Haddad right? Why might Jewell-Rung not have covered?

Sudipta · Accepted Answer

Answer
According to the legal definition, lost profits are nothing but consequential damages. In other words, lost profits are the financial damages caused due to disruption in business operations. Here financial damages could be reflected in any form, including property damage, patent infringement, breaching of contract, accidental damage, and others. In other words, the accumulated total loss due to a breach of contract within a specific period is called lost profit.

Jewell-Rung was a Canadian corporation that imported and sold men’s clothing at wholesale. Haddad was a New York corporation that manufactured and sold men’s clothing under the ‘‘Lakeland’’ label. The...

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