Also known as: income potentials · earning capacity
Written by attorneys · grounded in primary & secondary sources — see below
A measure of a person's or entity's future ability to generate earnings. It quantifies pecuniary loss when tortious conduct impairs that ability.
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Luis lost the use of his hand in a press accident. He proved past wages with payroll records but offered only general testimony about expected overtime and a missed promotion. The court permitted recovery of those items only to the extent Luis supplied evidence showing the amounts with reasonable certainty under the circumstances.
A burst pipe flooded Lina Gems' inventory and forced a two-week closure during the busiest sales period. Lina introduced sales records and vendor invoices to show reduced profits. The court treated the lost profits as impairment of earning capacity and allowed recovery once she proved the pecuniary amount.
Idris Ives suffered a permanent back injury that eliminated his construction work. He died of unrelated causes before trial. His estate recovered only for the earning-capacity loss he actually experienced before death. Post-death projections were barred.
Ivan Ivanov and Imani Idowu lived together for years while building a business. Ivan had substantially greater income potential than Imani. A court refused to impose a per se rule barring contract claims, noting that such a rule would encourage the higher-earning partner to avoid marriage and retain all assets.
Ira Irving and Israel Irving filed joint returns while living as spouses. Israel performed domestic and business services expecting compensation tied to their combined income potential. The court recognized that the long relationship and shared tax filings supported a cognizable claim for the value of those services.
In Iain Irons' divorce, his spouse sought half the value of the M.B.A. he earned during marriage. The court held that an educational degree lacks the attributes of property because it is personal, nontransferable, and merely assists future acquisition of assets through income potential.
The plaintiff must show actual pecuniary loss with reasonable certainty. Courts allow recovery for harm to earning capacity when the evidence supplies a reasonable basis for quantifying the loss, even if perfect precision is impossible.
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Yes. Recovery is limited to harms suffered before death. Post-death projections of lost income potential are not recoverable under survival statutes.
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Courts may impute income based on earning capacity when a party is voluntarily unemployed or underemployed. Statutes expressly permit using the difference between actual earnings and demonstrated income potential.
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…and property rights of unmarried cohabitating parties will not be recognized might actually encourage a partner with greater income potential to avoid marriage in order to retain all accumulated assets, leaving the other party with nothing. See Marvin v. Marvin, supra , 18 Cal. 3d at 683, 134 Cal. Rptr. at 831, 557 P.2d at…