Florafax International, Inc. v. GTE Market Resources, Inc.

Florafax (plaintiff) contracted with florist Bellarose to handle its floral order calls, then subcontracted that work to GTE Market Resources (defendant), which knew it was servicing the Bellarose account and agreed in its own contract to pay Florafax consequential damages and lost profits if it breached or terminated. GTE, despite its own market analysis showing it would not profit from the deal, entered the contract anyway, then repeatedly failed to fulfill its call-handling obligations, prompting Bellarose to terminate its agreement with Florafax and Florafax to terminate its agreement with GTE. Florafax sued GTE for the resulting lost profits from the Bellarose relationship, the jury awarded those damages, and GTE appealed.