California Civil Jury Instructions (CACI) (2017)

1921. Buyer’s Damages for Purchase or Acquisition of Property—Lost Profits

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1921.Buyer’s Damages for Purchase or Acquisition of
Property—Lost Profits
[Name of plaintiff] may recover damages for profits [or other gains] [he/
she/it] would have made if the property had been as represented. [Name
of plaintiff] can recover these profits [or other gains] only if [he/she/it]
has proved all of the following:
1. That [name of plaintiff] acquired the property for the purpose of
using or reselling it for a [profit/gain];
2. That [name of plaintiff] reasonably relied on [name of defendant]’s
[false representation/failure to disclose/promise] in entering into
the transaction and in anticipating [profits/gains] from the use or
sale of the property; and
3. That [name of defendant]’s [false representation/failure to
disclose/promise] and [name of plaintiff]’s reliance on it were both
substantial factors in causing the lost profits.
You do not have to calculate the amount of the lost profits with
mathematical precision, but there must be a reasonable basis for
computing the loss.
New September 2003
Directions for Use
This instruction should be read immediately after CACI No. 1920, Buyer’s
Damages for Purchase or Acquisition of Property, if the plaintiff is claiming lost
profits.
Sources and Authority
• Fraud in Sale of Property: Buyer’s Damages for Lost Profits. Civil Code section
3343(a)(4).
• “With glaring inconsistency, California’s statutory structure before 1971
permitted recovery of lost profits and earnings under Civil Code section 3333 in
fraud cases which did not concern the ‘purchase, sale or exchange of property,’
and even in simple negligence cases and breach of contract cases the injured
parties could recover lost profits and earnings, while the ‘out of pocket’ rule
barred the fraud victim in property transaction cases from recovering more than
the difference between the amount he paid for the property and its actual
value.” (Channell v. Anthony (1976) 58 Cal.App.3d 290, 312 [129 Cal.Rptr.
704], internal citations and footnote omitted.)
• “The Legislature removed all doubt concerning the recovery of loss of profits
resulting from the fraudulently induced property acquisition. Clearly and
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specifically, lost profits proximately caused are recoverable. The cases cited, the
arguments made concerning Civil Code section 3343 limitations are simply not
relevant to post-1971 proceedings, where profits are the claimed loss. Civil
Code section 3343 as amended, in so many words, authorizes recovery of lost
profits.” (Hartman v. Shell Oil Co. (1977) 68 Cal.App.3d 240, 247 [137
Cal.Rptr. 244].)
Secondary Sources
6 Witkin, Summary of California Law (10th ed. 2005) Torts, §§ 1714–1716
3Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts,
§ 40.23 (Matthew Bender)
23 California Forms of Pleading and Practice, Ch. 269, Fraud and Deceit (Matthew
Bender)
10 California Points and Authorities, Ch. 105, Fraud and Deceit (Matthew Bender)
CACI No. 1921 FRAUD OR DECEIT
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