There are countless instances in life where people and businesses are hurt by wrongful acts or omissions by others but the harm suffered is “speculative,” and therefore not compensable in a court of law. The most obvious example is defamation. If someone talks trash about you, in almost every instance, you will be hard-pressed to tie the calumny to specific monetary losses.
Parties to contracts often agree between themselves that, if particular provisions of the contract are breached, the harm will be “irreparable.” Clauses of this sort reflect widespread recognition that many harms exist, indeed terribly destructive harms, where the link between the wrong done and the harm suffered is difficult to establish. In theory, this “irreparable harm” contractual term makes it easier for the injured party to go to Court to get an injunction — an order from the court prohibiting conduct — regardless of a party’s inability to nail down a specific dollar amount to its injury.
When Party A and Party B agree that breach of an agreement would result in irreparable harm, can a Court find that aggrieved Party A, alleging a breach of contract, has failed to prove irreparable harm?
Yes, as the Minnesota Vikings Football Stadium (MVFS) learned late last week in its battle with Wells Fargo.
Despite the fact that MVFS and Wells Fargo had agreed that violation of certain ad-display terms in a contract would result in “irreparable harm,” U.S. District Court Judge Donovan W. Frank (D. Minn.) held that MVFS could not obtain injunctive relief because the harm was “speculative.”
What is the point of negotiating and contracting for “irreparable harm” clauses if actual irreparable harm must then be proved? Haven’t the parties already agreed that challenges of proof might make after-the-fact award of money impossible or insufficient to remedy the harm caused?
And are “speculative” injuries “non-existent” injuries? Or merely “unproven” injuries? Or are speculative injuries simply “of uncertain or immeasurable amount”? All of the above?
Let’s assume that companies advertise because it helps their businesses make money. Is that basic assumption speculative? I would suggest to you that there is a widespread understanding that company advertising is motivated by a desire to make money and that advertising, in fact, helps companies make money. But can any business prove that a particular sign on a particular building makes the business a particular sum of money?
If Business A’s signage make money for Business A. Is it not fair to say that Business A’s advertising hurts Direct Competitor Business B? Is that corollary speculative? In what sense?
Notions of “irreparable harm” and “speculative damages,” as used in the law, are not terms used with their literal meaning. Rather, they are amorphous concepts that courts apply to express a general disfavor and disinclination to assert the courts’ “equitable powers.” For better or worse, U.S. courts much prefer the indirect and post facto exertion of power, through awarding monetary remedies (after often-lengthy adjudication), to using their injunctive powers to compel compliance with the law in the first place.