## Facts

- Florafax International, Inc. operated a floral-order business that depended on call-center and telemarketing services.
- Florafax contracted with GTE Market Resources, Inc. to provide telecommunications and telemarketing services supporting Florafax’s operations.
- Florafax had a separate, collateral contract with Bellerose Floral, Inc. that generated profits for Florafax through servicing Bellerose’s customer transactions.
- Florafax alleged GTE materially underperformed (including inadequate call handling and poor service quality), impairing Florafax’s ability to service Bellerose.
- Bellerose terminated its relationship with Florafax, and Florafax attributed the termination to GTE’s deficient performance.
- At trial, Florafax sought consequential damages including lost profits tied to the Bellerose relationship; the jury awarded $750,000 in lost profits, based on an expected continuation of roughly two years.
- On appeal, the intermediate court limited lost profits to 60 days based on a 60-days’ notice termination provision in the Florafax–Bellerose contract; the state supreme court accepted review limited to lost-profit issues.

## Issues

1. Whether a contracting party may recover lost profits from a collateral third-party contract as consequential damages for breach when the losses were allegedly caused by the breaching party’s deficient performance.
2. Whether a termination-on-notice provision in the collateral contract automatically limits recoverable lost profits to the notice period.
3. Whether competent evidence supported the jury’s two-year lost-profit award such that it should be left undisturbed on appellate review.

## Decision

- The Oklahoma Supreme Court held the jury’s lost-profit award over the longer, approximately two-year period was permissible under Oklahoma contract-damages law and supported by competent evidence.
- The court vacated the intermediate appellate decision to the extent it disturbed the jury verdict and trial court judgment on lost profits and affirmed the trial court’s lost-profit award.
- The court rejected the intermediate court’s categorical 60-day cap based on the collateral contract’s termination clause, concluding that expected duration beyond the notice period could be found on the evidence.

## Legal Principles

- Lost profits from a collateral contract may be recovered as consequential damages if the loss was within the contemplation of the parties at the time of contracting and was reasonably foreseeable.
- Lost profits must be proven with reasonable certainty; mathematical precision is not required, but speculation is insufficient.
- A termination-on-notice clause in a collateral contract does not automatically limit recoverable damages to the notice period when evidence supports that the relationship likely would have continued absent the breach.
- In an action at law, a jury verdict on disputed facts will not be disturbed on appeal if there is any competent evidence reasonably tending to support it.

## Conclusion

The court reinstated and affirmed the jury’s $750,000 lost-profit award, holding that collateral-contract lost profits are recoverable consequential damages when foreseeable and proven with reasonable certainty, and that a termination-on-notice provision does not operate as an automatic damages cap when the evidence supports a longer expected business relationship.


Florafax Int'l, Inc. v. GTE Mkt. Res., Inc., 933 P.2d 282 (Okla. 1997)