Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
in landlord-tenant law
An item of contract damages recoverable by a tenant when the lease contemplates business use of the premises. Recovery requires that the loss be proven to a reasonable degree of certainty, result from the landlord's default, and have been reasonably foreseeable by the landlord at the time the lease was made.
2
Sense 1
1
in landlord-tenant law
An item of contract damages recoverable by a tenant when the lease contemplates business use of the premises. Recovery requires that the loss be proven to a reasonable degree of certainty, result from the landlord's default, and have been reasonably foreseeable by the landlord at the time the lease was made.
Sources & Authorities· 1 source
Select any source to read its text and confirm it supports the definition.
Restatements
Sense 2
2
in partnership law
A share of net earnings from a business received by a person in connection with that business. Receipt of such a share creates a presumption that the recipient is a partner unless the payment falls within a statutory exception such as wages, rent, or loan interest.
Sources & Authorities· 2 sources
Select any source to read its text and confirm it supports the definition.
Practice Questions
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Test Yourself
10
Practice Questions5
in partnership law
A share of net earnings from a business received by a person in connection with that business. Receipt of such a share creates a presumption that the recipient is a partner unless the payment falls within a statutory exception such as wages, rent, or loan interest.
Each sense below has its own examples, sources, and questions.
Examples1
Lost Tutoring Revenue After Lighting Default
Park School leased classroom space from Cedar Institute under a lease that required the landlord to install parking-lot lighting and signage for evening sessions. Cedar Institute never completed the work. Parents cited the dark lot as unsafe and withdrew their children, causing enrollment and revenue to drop sharply. Park School proved the decline with pre-default enrollment records, waiting lists, and profit-margin data. Because the lease contemplated business use and the landlord could foresee that inadequate lighting would reduce evening attendance, Park School recovers the lost anticipated business profits.
Frequently Asked2
What must a tenant prove to recover lost business profits after a landlord's breach?+
The tenant must show that the lease contemplated business use, that the loss is proven to a reasonable degree of certainty, that it resulted from the landlord's default, and that the landlord could reasonably have foreseen the loss at lease formation.
Supporting sources
Can a tenant recover both lost profits and substitute-premises costs after the same breach?+
Yes, provided there is no double recovery for the same loss. The Restatement permits recovery of multiple enumerated items of damages so long as the awards do not overlap.
Supporting sources
Examples1
Profit Share Creates Partnership Presumption
Captain Sofia Lopez orally agreed with BlueWave Charters to manage all bookings, hire crew, and oversee maintenance in exchange for one-third of the net profits from tourist fishing trips. BlueWave supplied the vessel and paid insurance. When a dispute later arose over Lopez's status, the court applied the presumption that a person receiving a share of business profits is a partner because the arrangement did not fit any statutory exception such as wages or loan interest.
Frequently Asked1
Does receiving a share of profits always make someone a partner?+
No. Receipt of a share of profits creates a presumption of partnership, but the presumption does not apply if the payment is for wages, rent, loan interest, debt repayment, or the sale of goodwill or property.
Supporting sources
Business Associations RelationshipsFiduciary duties within business associations · Fiduciary duties of general partnersNEXTGENIntermediate