Page 10 - Calculating Lost Profits
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Overview ........................................................................................................................................................... 64
"In Lieu of" and "Origin of the Claim" ............................................................................................................. 64
Raytheon and the “In Lieu of” Test .................................................................................................................. 64
Gilmore’s “Origin of the Claim” Test for Damages or Settlements Paid ......................................................... 65
Timing of Profits Lost Versus Damages Received ........................................................................................... 65
Figure 10.1. Example of Effect of Timing of Damages Compared to Damages Award Receipt ................. 66
Discount Rates and Taxes ................................................................................................................................. 66
Figure 10.2. Taxes on Growth During Discounting Period .......................................................................... 67
Chapter 11 — Mitigation ................................................................................................................................... 68
Overview ........................................................................................................................................................... 68
Cases With a Reduction in Lost Profit Damages for Failure to Mitigate ......................................................... 69
Cases With Offsets in Lost Profit Damages for Mitigation .............................................................................. 69
Cases Showing Exceptions to the Mitigation-of-Damages Doctrine ............................................................... 70
Cases Addressing Mitigating Revenues Versus Additional Revenues ............................................................. 71
Application of the Mitigation-of-Damages Doctrine ........................................................................................ 71
Limitations to the Plaintiff’s Ability to Mitigate .............................................................................................. 71
Suggestions for Practitioners in Evaluating Mitigation in Lost Profits Claims ................................................ 72
Appendix A — Case Opinions ........................................................................................................................... 73
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