Glossaire

Loss of profit

Loss of profit (manque à gagner) refers to the profits a company would have generated but for a harmful event — breach of contract, unfair competition, wrongful termination of a commercial relationship. It encompasses both direct lost revenue and the associated profit margin foregone. In economic damage quantification, loss of profit is typically calculated using the but-for method: projecting the financial performance that would have occurred in the absence of the harmful event and comparing it to actual performance. It is distinct from loss of chance in that it applies when profit generation was certain or near-certain rather than merely probable.

Example: a Swiss distributor loses an exclusive supply agreement due to wrongful contract termination. Over a 3-year period, lost revenues are estimated at CHF 4.8 million with a 35% gross margin — a CHF 1.68 million direct gross profit loss. After deducting saved variable costs of CHF 280,000, the net loss of profit amounts to CHF 1.4 million, supported by a detailed comparison with the distributor's historical performance on equivalent contracts.

Hectelion quantifies loss of profit in commercial litigation and arbitration proceedings, building rigorous but-for models that withstand judicial and arbitral scrutiny.

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