When a deal falls through or a business partner doesn’t hold up their end of the bargain, the damage can go beyond immediate costs. Often, the real harm is in the profits your business expected to earn — and didn’t. That’s where lost profits come in.
In Florida, you can sue for lost profits in a business dispute, but these damages come with strict legal requirements. Courts expect you to prove not only that you lost money, but that those profits were reasonably certain and directly caused by the other party’s actions.
Here’s what Florida business owners need to know.
🧾 What Are Lost Profits?
Lost profits are the net income your business would have earned if the other party had not breached a contract or committed a wrongful act. They can include:
- Missed revenue from lost sales or clients
- Income from contracts that were canceled or delayed
- Future profits you can no longer realize due to the dispute
These are different from direct damages (like unpaid invoices or replacement costs) — lost profits are consequential damages, and that makes them more difficult to prove.
✅ When Are Lost Profits Recoverable in Florida?
You can recover lost profits in Florida if you can prove three key things:
1. There Was a Valid Legal Wrong
This could be:
- A breach of contract
- A business tort like fraud, interference, or misrepresentation
- A violation of a duty that caused economic harm
2. The Other Party’s Actions Caused Your Lost Profits
You must show a direct link between what they did and the profits you lost. This means proving that:
- Your business was positioned to earn the profits
- The breach or wrongdoing caused them to be lost
- No unrelated market or internal factor caused the loss
3. The Lost Profits Can Be Proven With Reasonable Certainty
Florida courts will not award damages based on speculation or vague estimates. You must use:
- Past financial records
- Forecasts, projections, or contracts
- Industry standards or expert analysis
💼 Common Business Disputes Involving Lost Profits
- A supplier fails to deliver materials on time, causing you to lose a key client
- A partner backs out of a deal at the last minute, disrupting an expected product launch
- A client breaches a multi-year contract, forcing you to shut down a service line
- A competitor uses your trade secrets to win business you were set to earn
In each case, if the profits were measurable and foreseeable, you may have a valid claim.
📊 How Are Lost Profits Calculated?
There’s no one-size-fits-all method, but two common approaches are:
🔹 Before-and-After Method
Compare your actual profits before the breach to the decline after. This works best for established businesses with solid financial records.
🔹 Yardstick Method
Compare your performance to similar businesses that weren’t affected by the breach. This is useful for newer companies or when industry data is available.
Either method requires:
- Revenue projections
- Cost breakdowns
- Net profit calculations (not just gross revenue)
Fixed and overhead costs must be considered — you can only recover net lost profits, not total lost sales.
⚠️ Challenges in Recovering Lost Profits
Florida courts are cautious about awarding lost profits because:
- They are forward-looking, and
- They can easily become speculative
You must present a detailed, credible, and data-backed case. Vague claims like “we lost a lot of business” won’t be enough.
Also, the profits must have been foreseeable at the time of the contract — meaning the other party should have reasonably known that their actions could cause this kind of financial loss.
🛡️ How to Strengthen Your Claim
- Keep organized financials: income statements, profit margins, tax returns
- Preserve emails, projections, and sales pipelines showing what was expected
- Get expert help if needed (e.g., a forensic accountant or damages expert)
- Act promptly — don’t let time weaken your records or position
When to Talk to a Business Attorney
If you believe your business lost profits due to another party’s breach or wrongful conduct, legal strategy is key.
An attorney can help you:
- Evaluate if the lost profits are provable
- Identify and preserve the right evidence
- Send a demand letter or file suit
- Work with experts to quantify and present your damages
How Douglas Firm Helps
At Douglas Firm, we represent Florida business owners in:
- Breach of contract claims involving lost profits
- Business tort litigation (interference, fraud, misrepresentation)
- Financial analysis and case strategy for damages recovery
- Negotiation, settlement, and litigation support
We help you quantify what was lost — and pursue what you’re owed with clarity and confidence.
Contact Douglas Firm Today
If your business has missed out on profits because of another party’s actions, don’t assume they’re unrecoverable. We’ll help you build a case based on the numbers and the law.
📞 954.474.4420
📧 andrew@douglasfirm.com
🌐 www.douglasfirm.com