No. The ban on 'lost profits' only applied to indirect, ripple-effect profits, not the direct profits Penncro expected to make from the Sprint deal itself. The court compared the contract's wording to a doctor telling you, 'Don't eat fried foods—including things like french fries.' That doesn't mean you can't eat potatoes at all, just not fried ones. Here, 'consequential damages' was the category (fried foods), and 'lost profits' was just one example within that category (french fries). Penncro could still claim its direct, 'un-fried' profits from the main deal. The court also ruled that Sprint had to pay for the full number of work hours it promised, because the contract was for keeping a team ready, not for paying per call.

The court said no, Sprint does have to pay Penncro for the profits they lost directly because of Sprint breaking the contract. The contract wasn't clear enough to make lost profits completely off-limits. 

The court also said Sprint has to pay for the full amount of work hours they agreed to, even though they didn't end up needing Penncro to work that much. The contract clearly said Sprint would pay the set amount no matter what, and the part about adjusting the amount for bad performance didn't change that.

When a contract uses different language in proximate and similar provisions, we commonly understand the provisions to illuminate one another and assume that the parties' use of different language was intended to convey different meanings

The contract at issue prohibited the recovery of " `consequential damages,'specifying that they `include, but are not limited to, lost profits, lost revenues and lost business opportunities.'"

Direct damages refer to those which the party lost from the contract itself—in other words, the benefit of the bargain—while consequential damages refer to economic harm beyond the immediate scope of the contract

—the Tenth Circuit affirmed Judge Lungstrum's decision permitting recovery of lost profits as direct damages despite a limitation of liability provision that barred recovery of " `consequential damages,'specifying that they `include, but are not limited to, lost profits, lost revenues and lost business opportunities.'"

To begin with, where parties use different language in different provisions of a contract, courts presume that those provisions have different meanings.

—explaining that one situation in which lost profit damages are considered direct is "if a services contract is breached and the plaintiff anticipated a profit under the contract

—holding clause limiting recovery of consequential damages "including... lost profits" barred only consequential lost profits

So too here—the contract bars not all lost-revenue damages but only those lost-revenue damages that properly fall within the category of "consequential" damages.

Lost profits, under appropriate circumstances, can be recoverable as a component of either (and both) direct and consequential damages.

Mr. McComb offers no argument or reason for us to think that the district court's findings, while perhaps contestable, were clearly erroneous—that is "more than possibly or even probably wrong," but "pellucid to any objective observer."

No. A contractual provision barring consequential damages that includes lost profits as an example does not preclude the recovery of direct lost profits. The court reasoned that the structure of the clause, the common legal meaning of its terms, and a holistic reading of the contract all indicate that the parties intended to bar only those lost profits that are consequential in nature, not those that flow directly from the breach. First, the court analyzed the syntax of Section 13, finding that the word 'include' means 'to place... as a part or component of a whole.' Therefore, 'lost profits' in the clause refers only to the subset of lost profits that are consequential damages, not all lost profits. Second, the court explained that while direct damages represent the benefit of the bargain, consequential damages are economic harms beyond the contract's immediate scope; lost profits can be either. The clause only addresses the consequential type. Third, the court compared Section 13 with Section 12, which covers third-party claims and uses the much broader phrase 'all ... damages.' The use of different language in proximate provisions implies an intended difference in meaning. Finally, the court found that the contract unambiguously created a fixed-capacity obligation, requiring Sprint to pay for 80,625 hours of available labor, not just hours actually used, making the expected revenue from those hours direct damages.

Yes. The contract's exclusion of consequential damages, even though defined to include lost profits, does not unambiguously bar recovery of direct lost profits resulting from Sprint's breach. The parties did not clearly manifest an intent to deviate from the ordinary meaning of consequential damages as those beyond the immediate scope of the contract. 

Further, the plain language of the contract obligated Sprint to pay for 80,625 hours of productive capacity per month, regardless of whether it actually utilized that capacity, because the contract contained an unqualified promise to pay without conditioning payment on Penncro's performance. The incentive plan allowing for adjustments based on performance did not alter the fundamental nature of Sprint's promise to pay for the agreed capacity.

Penncro Associates, Inc. v. Sprint Spectrum, LP

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