Case Citation
Legal Case Name

Fera v. Village Plaza, Inc Case Brief

Michigan Supreme Court1976Docket #1264547
242 N.W.2d 372 396 Mich. 639 92 A.L.R. 3d 1278 1976 Mich. LEXIS 276 Contracts Remedies Property

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Case Brief Summary & Legal Analysis

Contracts Focus
3 min read

tl;dr: A landlord breached a lease for a new business. The court rejected a strict rule barring new businesses from recovering lost profits, holding that such damages are recoverable if proven with reasonable certainty through sufficient evidence.

Legal Significance: This case rejects the traditional ‘new business rule’ as a per se bar to recovering lost profits, shifting the legal standard from the business’s age to the certainty and sufficiency of the evidence presented to prove damages.

Fera v. Village Plaza, Inc Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Plaintiffs Frank and Fera Fera executed a ten-year lease with defendants for a ‘book and bottle’ shop in a new shopping center. The lease stipulated a minimum monthly rent plus a percentage of annual receipts. Before the space was ready for occupancy, the property’s ownership changed, and the plaintiffs’ lease was misplaced. When the shopping center opened, the defendants refused to honor the lease, having rented the designated space to another tenant. Defendants offered an alternative location, which the plaintiffs rejected as unsuitable. The plaintiffs sued for breach of contract, seeking damages for anticipated lost profits from their unestablished business. At trial, both parties presented extensive expert testimony regarding the potential profitability of the proposed venture, with estimates ranging from a net loss to a profit of $270,000 over the lease term. The jury awarded the plaintiffs $200,000. The Court of Appeals reversed, applying the traditional rule that lost profits for a new business are too speculative to be awarded.

Court Holding & Legal Precedent

Issue: Can a new business recover damages for anticipated lost profits resulting from a breach of contract if those profits can be established with a reasonable degree of certainty?

Yes. The court reversed the Court of Appeals and reinstated the jury’s Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

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IRAC Legal Analysis

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Legal Issue

Can a new business recover damages for anticipated lost profits resulting from a breach of contract if those profits can be established with a reasonable degree of certainty?

Conclusion

This decision firmly establishes that the recoverability of lost profits for a Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostru

Legal Rule

Anticipated lost profits are recoverable for a breach of contract, even for Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure

Legal Analysis

The Michigan Supreme Court rejected a rigid application of the 'new business Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat

Flash-to-Full Case Opinions

Flash Summary

  • Rejects the per se “new business rule” that automatically bars recovery
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fug

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