The loss of opportunity to make a profit is compensable

According to a court judgment of 8 October 2013, the 3rd Civil Chamber of the French Supreme Court has recognized that a loss of opportunity to make a profit can be certain and therefore compensable.

In this case, a company had made a promise to sell various plots and a house to a property developer who wanted to create a subdivision. The promise of sale had been rescinded by the promisor and the developer had asked to be compensated for the loss of opportunity to make a profit on the subdivision’s sale. The Nimes Court of Appeal, in its court judgment of 3 May 2012, denied the property developer’s request on the grounds that the “loss of chance of making a profit is not a direct and certain damage that can be compensated“.

Quashing the judgment of the Court of Appeal, the French Supreme Court held that “the loss of opportunity to make a profit is compensable prejudice if there is a current and certain disappearance of a favorable event.”

The interesting points of this decision are the requirement for allowing the loss of opportunity. Indeed, the law has changed recently on this point and the judgment confirms this change.

Previously, the loss of opportunity was compensable if two conditions were met. First, it must be shown that the loss of opportunity was certain. Then we had to justify that the opportunity had a sufficient likelihood of being realized (in this sense : Cass. Civ. 1st 16 June, 1998, n° 96-15.437 ; Cass. Civ. 1st April 4, 2001, n° 98-23.157 ; Cass. Civ. 1st May 7, 2008, n° 06-14.836 etc.).

The condition requiring a sufficient likelihood that the lost opportunity is realized was finally abandoned.

Now, the case law requires only that the opportunity’s loss is certain (Cass. Civ. 1st January 16, 2013, n°12-14439).

In this judgment, the French Supreme Court confirms this change by only referring to the certainty of the loss. In addition, the French Supreme Court sees no objection that the loss of opportunity to make a profit can be called certain. Of course, the French Supreme Court did not rule on the amount of compensation…

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