Lost Profits Damages Law and Legal Definition

Lost profit damages are an estimate of the total sum of money lost due to the buyer's breach of agreement. It is the computation of benefits that would have been made by the seller on a sale if the buyer had adhered to the contract. The plaintiff can claim lost profit damages from the buyer by showing that the buyer's demand was met by the seller according to the terms of the agreement, and that no alternative remedy exists. In laws regarding patents, lost profits damages refer to the loss caused to the patent owner due to actions of the infringer.