## Facts

- A cigarette-machine manufacturer contracted with a tobacco company to supply a “Briggs” cigarette machine for operation and exhibition at the 1904 St. Louis Exposition.
- The manufacturer prepared and equipped the machine for the exhibition and incurred expenses in doing so.
- Shortly before the exposition opened, the tobacco company refused to operate and exhibit the machine.
- The tobacco company contended its performance was subject to a condition precedent: securing free exhibition space, which it claimed it could not obtain without fault.
- The manufacturer sought damages for (1) out-of-pocket preparation expenses and (2) lost profits from expected increased machine sales due to the exhibition.
- A jury found a willful, unjustified breach and awarded both preparation expenses and a separate amount for lost profits tied to anticipated increased sales.

## Issues

1. Whether claimed lost profits from expected increased sales based on an exhibition were recoverable when the amount depended on uncertain future sales and lacked concrete evidentiary support.
2. Whether the defendant’s duty to exhibit was conditioned on obtaining free exposition space, and whether the alleged failure of that condition excused performance.

## Decision

- The court sustained the breach finding and did not disturb the jury’s rejection of the asserted condition precedent defense.
- The court affirmed recovery of proven expenditures reasonably incurred to prepare and equip the machine for the contemplated exhibition.
- The court reversed the lost-profits award because it rested on speculation about potential future sales rather than reliable data.
- The case was remanded for further proceedings limited to correcting the improper lost-profits component of damages.

## Legal Principles

- Lost profits are recoverable for breach of contract only when they can be proved with reasonable certainty and computed from a fixed standard or reliable data.
- Anticipated profits dependent on contingent events (such as uncertain customer response and unproven future sales at a promotional exhibition) are too speculative to support an award.
- Foreseeability that a breach could reduce profits is not enough; the amount of the claimed profits must be shown with reasonable certainty.
- A willful or bad-faith breach does not relax the requirement that damages, including lost profits, be proven with reasonable certainty.
- Reliance-type damages, including reasonable and proven expenditures made in preparation for performance, are recoverable when proximately caused by the breach and established by concrete proof.

## Conclusion

The court limited contract damages to amounts proven with reasonable certainty, allowing recovery of the manufacturer’s preparation expenses while rejecting speculative lost profits based on hoped-for increased sales from an unperformed exhibition.


Winston Cigarette Mach. Co. v. Wells-Whitehead Tobacco Co., 141 N.C. 284, 53 S.E. 885 (N.C. 1906)