QUESTION

Neglect that leads to loss of customers/revenue. Dry clean delivery service

Asked on May 07th, 2018 on Business Law - California
More details to this question:
HI there. I own a delivery dry clean service. I've been in business for almost 16 years. I had been doing business with a dry clean plant for the last three years, no longer. They had a contamination issue with their dry clean machine that made my customers' clothes smell. I lost a lot of decade-long customers because of it. The mechanic who helped with trying to fix the machine told me it was due to neglect/no maintenance. He said it was really quite foul the amount of dirt that had built up over the years which was easily preventable with regular maintenance. We only did business on a handshake, no paperwork. Is there a case?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
There may be a case for breach of contract, for failing to do the work properly, but you would probably only be able to recover the money you paid for them to clean the clothes, not the money you lost from losing customers.  It is not only very difficult to prove with any certainty that you lost customers, and how many customers and how much you would have made, because of the smell, but such damages are called "consequential damages", as opposed to direct damages, and are not normally recoverable in a breach of contract case except under particular circumstances. If I fail to repay a $1000 loan to you, the $1000 you lost are direct damages, i.e. damages that naturally flow from the breach.  If, because you didn't have the $1000, you couldn't buy a car and lost a job that would have  paid you $100,000 a year, those are considered consequential damages, i.e. damages which don't necessarily happen every time a loan isn't repaid but happened to occur in your situation.  These damagew are normally not recoverable unless they are within the contemplation of the parties at the time of contracting.  In other words, you may be able to recover them if you told me, at or before the time of the loan, that you would lose this job if I didn't repay you in time, but not otherwise.   In your case, where you lost customers because they didn't do the work right, it is a closer call, because that is more foreseeable and some courts may find it to have been within the contemplation of the parties at the time of contracting, but my bet would be that the damages would not be allowed.   Moreover, you have to think that if they ignored needed maintenance, they may be short on money and you wouldn't be able to collect. None of this is to say that you shouldn't consult an attorney in Ca. to look into your prospects, especially since it will probabl y coxst you little more to fule a suit seeking the return of they money you paid as it will to seek the additional damages, but my guess is that, given the problem  you will have proviing that the lost customers were due to the smell, the real question of whether these damages are recoerable, and the possibility that you won't be able to collect even if you win, you will probably decide not to pursue this claim if yoiu can get some money beck that you paid.
Answered on May 07th, 2018 at 12:38 PM

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