## Facts

- A gasoline wholesaler entered a product sales agreement with a service-station operator requiring purchases of Texaco gasoline for five years, with a minimum of 2,000,000 gallons in substantially equal monthly quantities, continuing after five years until the minimum was met.
- The wholesaler provided $40,000 in interest-free financing for station improvements, repayable at two cents per gallon sold.
- The wholesaler also advanced an additional loan of about $26,000 for environmental cleanup, repayable in 1993.
- After the station operator’s husband died in 1994, the operator closed the repair business, and gasoline sales declined.
- The wholesaler stopped deliveries and sued for unpaid gasoline invoices, outstanding loan balances, and lost profits for failure to meet the minimum gallonage requirement.
- At trial, the wholesaler’s lost-profit proof consisted largely of testimony estimating a five-cents-per-gallon profit based on a rough calculation without supporting documents or business financial proof.

## Issues

1. Whether claims for unpaid gasoline invoices and loan balances were time-barred.
2. Whether the death of a co-owner and resulting business decline rendered performance commercially impracticable, excusing the minimum-purchase obligation.
3. Whether the wholesaler proved entitlement to lost-profit damages under N.J.S.A. 12A:2-708(2) as a lost-volume seller and proved net lost profits with reasonable certainty.
4. Whether the trial court erred in denying prejudgment interest on the contract debt.

## Decision

- The court affirmed the $56,149.90 judgment for unpaid gasoline invoices and outstanding loan balances.
- The court rejected the commercial impracticability defense as a basis to excuse contractual performance.
- The court reversed the $30,415.85 lost-profits award because the wholesaler failed to provide adequate proof under N.J.S.A. 12A:2-708(2), including lost-volume seller status and non-speculative net profits.
- The court affirmed the denial of prejudgment interest on the contract debt.

## Legal Principles

- A seller seeking lost profits under N.J.S.A. 12A:2-708(2) must prove lost-volume seller status with evidence that it had the capacity to make both the breached sale and other sales and that the breach caused a lost sale rather than a substituted sale.
- Lost-profit damages under N.J.S.A. 12A:2-708(2) must be proven as net profits with reasonable certainty; unsupported estimates or rough calculations, without competent documentary or financial proof, are insufficient.
- Commercial impracticability does not excuse a commercial supply obligation merely because a co-owner dies and the buyer’s business circumstances worsen; the defense requires a legally sufficient impracticability event tied to the performance obligation.
- Trial courts retain equitable discretion on prejudgment interest in contract matters, and appellate courts will not disturb that determination absent error or abuse of discretion.

## Conclusion

The appellate court left intact the judgment for unpaid invoices and loan balances and the denial of prejudgment interest, but set aside the lost-profit award because the seller did not establish lost-volume seller status or quantify net profits with reliable, non-speculative proof as required by N.J.S.A. 12A:2-708(2).


P.F.I., Inc. v. Kulis, 363 N.J. Super. 292, 832 A.2d 931 (N.J. Super. Ct. App. Div. 2003)