When a partner walks away from a supply deal, a landlord locks the premises mid-season, or a contractor drags out a launch, a number appears in the owner’s head almost instantly. “I lost at least half a million” — and it feels obvious. But between the feeling of loss and the sum a court will actually award lies a wide gap. That gap is called proof.

Lost profit is not the money you have already spent. It is the profit you would have earned had the other side not broken the agreement. That is exactly why it is the hardest thing to prove: it concerns something that never happened. A court cannot see your missed sales with its own eyes — it sees only documents and a calculation. If the figure is pulled out of thin air, even a fair claim falls apart.

At LPF we have worked since 2018 with the very material such a calculation is built from: sales, contracts, accounts, bank statements. In this article we explain how lost profit is actually calculated, and why a gut-feel estimate does not hold up where the stakes are high.

Actual damages and lost profits are two different things

The first thing to separate, before any math, is two very different kinds of loss. They are often confused, yet a court treats them differently and demands a different level of proof for each.

  • Actual damages — money that has already left your pocket: spoiled goods, penalties paid, forced repairs, refunds returned.
  • Lost profit — income that never arrived: an unsold batch, an idle store, a contract you already held that fell through.
  • A different burden of proof — actual damages show up in receipts and records, while lost profit has to be reconstructed, because no document exists for something you did not receive.

That is why lost profit is the most fragile part of any claim. It is easy to assert and easiest to challenge when there is no transparent logic behind the number.

Why guesswork fails in court

An estimate of “I lost roughly this much” almost always works against the owner. It is usually inflated, because it is built on the best imaginable scenario, and it does not survive simple cross-questions. A court examines lost profit closely and tests it against a few markers.

  • Reality, not wishes — the income counted is what you truly could have earned under normal conditions, not an ideal hypothetical.
  • A direct link to the breach — you must show the loss came from the other side’s actions, not from the market, the season, or your own decisions.
  • Minus the costs — profit equals the lost income minus the costs you did NOT incur because the deal never happened: purchasing, delivery, wages for that order. A court counts net profit, not turnover.
  • Your effort had to be there — if you could have reduced the loss (found another buyer, sold the goods later) and did nothing, that portion is removed.
  • A provable baseline — the figure must rest on your real results from past periods, not on a promise that “it would have gone better.”

It is worth running your own claim through this list — the weak spots in a round number show up at once.

How we build the calculation

Instead of one impressive figure, we assemble a chain in which every link rests on your documents. The goal is simple: so that the other party or the court can check each step and find no soft point.

  • We take the baseline from your data — we look at what you genuinely earned in this line of business before the breach: sales, margin, seasonality.
  • We build the “but for” scenario — we model what would have happened under a normal course of events and compare it with what actually occurred.
  • We strip out outside influence — we set aside declines explained by the market or other causes, so the figure holds up under scrutiny.
  • We subtract the saved costs — leaving only the net profit you missed, not the whole turnover.
  • We show every step — so a lawyer, the opponent, or the court can see where each hryvnia came from.

We should say this plainly: our calculation is a well-grounded managerial and economic analysis for a decision and for negotiations — not an official report from a certified appraiser. If the case calls for a formal conclusion by an accredited specialist, we prepare the entire evidence base so it can serve as the foundation for that report, working alongside your lawyer.

What to gather so the figure holds

The sooner the documents are preserved, the stronger the calculation. The most useful items are those that fix both the agreement itself and your usual level of results.

  • The contract and correspondence — what locks in the agreement and the fact of the breach.
  • Records of past results — sales, margin, and workload for earlier periods in the same line.
  • Evidence of your effort — what you did to reduce the loss after things fell through.
  • A cost breakdown — the costs you would have carried had the deal gone ahead.

If you feel you lost money through someone else’s breach but do not know how to turn that feeling into a number a court or an opponent will hear, show us what you have. We will tell you honestly whether there is something to calculate, and help you build the kind of figure that stands up to any cross-question.