## Facts

- Westminster Communities, Inc. developed a 55-unit residential project and solicited flooring work for base installations and optional purchaser upgrades.
- V.A.L. Floors, Inc. prepared a base bid (about $443,000) using supplier/subcontractor quotes and labor estimates derived from union rates and productivity assumptions.
- Westminster informed V.A.L. that it accepted the bid, and the parties proceeded under a verbal agreement for V.A.L. to perform the work described in the bid.
- The parties discussed an upgrade program for unit purchasers; V.A.L. projected additional upgrade revenue of about $232,000 and viewed upgrades as significantly more profitable than base work.
- V.A.L. and a related entity (3L Company, Inc.) built an on-site showroom to market base and upgrade flooring selections to purchasers.
- V.A.L. estimated a 33% profit margin; after completing 19 units, plaintiffs asserted realized profits were about 36% and claimed substantial lost profits for the uncompleted units and anticipated upgrades.
- Westminster terminated the relationship on April 22, 1998 and retained another supplier.
- Plaintiffs sued for breach of contract seeking out-of-pocket losses and lost profits; the trial court found an enforceable oral contract but granted summary judgment against lost profits as too speculative.

## Issues

1. Whether plaintiffs’ proof of expected profits—based on prior experience, detailed cost analyses, and profits on the first 19 completed units—was sufficiently certain to allow a jury to award lost profits for the remaining work and expected upgrades.

## Decision

- The Appellate Division reversed the summary judgment that dismissed the lost-profits claim.
- The court held plaintiffs presented evidence permitting a jury to assess lost profits with reasonable certainty, rather than inviting impermissible speculation.
- The case was remanded for further proceedings, allowing plaintiffs to present lost profits to the fact-finder.

## Legal Principles

- Lost profits are recoverable in contract when proven with a reasonable degree of certainty and not merely speculative, remote, or contingent.
- The uncertainty bar concerns uncertainty as to the existence of damages, not imprecision in the amount once loss is shown.
- Absolute precision in calculating damages is not required; a fair and reasonable basis for estimating damages suffices.
- A breaching party cannot avoid liability solely because damages cannot be measured with exactness after the wrongful conduct and injury are shown.
- Evidence supporting reasonable certainty may include an established business’s prior performance, detailed pricing and cost methodology, and actual results from partial performance of the same project.
- Market variability and future cost/demand questions generally affect weight and credibility for the jury, not admissibility as a matter of law on summary judgment, when plaintiffs offer a fact-based methodology.

## Conclusion

The court ruled that plaintiffs’ detailed cost calculations, experience-based projections, and profit data from completed units provided a sufficient factual foundation for a jury to determine lost-profit damages, making dismissal on summary judgment improper despite future market uncertainties.


V.A.L. Floors, Inc. v. Westminster Communities, Inc., 355 N.J. Super. 416, 810 A.2d 625 (App. Div. 2002)