Penncro Associates, Inc. v. Sprint Spectrum, LP
United States Court of Appeals for the Tenth Circuit
499 F.3d 1151 (2007)
Penncro Associates (plaintiff) contracted to serve as Sprint Spectrum's (defendant's) bill collector under an agreement barring recovery of "consequential damages, including . . . lost profits" in any contract dispute; after Sprint breached the contract, Penncro sued to recover profits it would have directly earned performing the contract itself, and Sprint argued these lost profits were consequential damages barred by the contract. The district court granted Penncro summary judgment on liability, and after a damages trial awarded $17 million including lost profits; Sprint appealed.
Whether a contract clause excluding "consequential damages, including lost profits" bars recovery of profits the non-breaching party would have directly earned from the contract's own performance, or only profits lost indirectly as a secondary consequence of the breach.