LawRegulatory Compliance

Loss of income or loss of profit

Loss of profit, in fact, represents future expected revenues that are not received due to inadequate performance of the clauses and terms of the agreement of one of the economic parties. This lost income can be reimbursed under the Civil Code of the Russian Federation (the basis is Article 15). And this is one of the most essential conditions for the normal operation of any economic system, and it necessarily includes compensation for the damage (loss) to the full, including lost profits. All the evidence base should be submitted by the plaintiff independently, which is provided by Article 65 of the agrarian and industrial complex of the Russian Federation.

Unearned profit or The lost profit of the Civil Code of the Russian Federation is very complicated in the evidence. Demanding its compensation, the plaintiff must show a causal relationship on the facts between the improper actions of the partner (the respondent) and the losses incurred. This in itself is very difficult. In order to collect evidence, it is necessary to assess the amount of losses received on the basis of the concluded economic contract and the specifics of the violation of the obligations taken on it. Reparation can be carried out if the court fully provides all the evidence. These are the actual conditions for violation of obligations under the concluded contract, and the specific amount of losses, and the consistent relationship between them.

Expected return, Or loss of profit is Losses that could not be obtained by the plaintiff with the strict observance of all obligations under the concluded contract. Loss of profit is calculated on the basis of actual costs associated with the receipt of this income (profit). To do this, you can use the current methodology for determining the amount of loss. For example, the lost profit in the case of a decrease in sales volumes is determined as follows: first, there is a difference between the planned unit price and the selling price, then this result is multiplied by the total number of unrealized units due to violation of contract terms. The number of unrealized units is calculated specifically depending on the situation that has arisen. In such cases, late delivery, short delivery or incompleteness is possible. And, as a result of these inconsistencies, there is a lost profit in the production cycle .

To receive financial compensation from the defendant in such cases is possible only upon presentation of a reasoned claim backed up by valid documentary facts. And since in the process of the court session to determine the conditions for compensation of damages, the validity of the claims of the plaintiff is first determined, first of all, the contractual obligations and facts of violation of the items of the economic contract are considered. After that, the possibility of obtaining additional revenues and their use, as well as the causal and investigative link between them and the measures taken by the plaintiff for the purpose of preparation are studied.

In this case, the lost profit is supported by evidence of all possible measures taken to prepare for the receipt of income on the part of the plaintiff, including preliminary agreements on the conclusion of an economic contract. But with one reservation. If these contracts are not signed within the timeframe specified in the agreement, the obligations assumed become invalid and can not be applied in the form of reasoned evidence. Therefore, the lost profit as one of the opportunities to recover damages received under the Civil Code of the Russian Federation should be economically justified and supported by valid documents that testify to the possibility of obtaining financial benefits in the event that the respondent satisfied all the conditions in full compliance with the clauses of the business agreement.

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