Practice question
A business proves prevented sales of PHP500,000 and proves that PHP350,000 of associated production and delivery expense was not incurred. It demands PHP500,000 as net lost profit while admitting there is no other component or adjustment. Which is correct?
- The stipulated net lost profit is PHP150,000, not the gross sales figure
- The full revenue is necessarily net profit
- The avoided expense must be added to revenue
- Net profit automatically equals zero in every prevented sale
- The business may choose whichever figure is larger without accounting
Legal references
- Civil Code RA386: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html Articles2199–2200,2205.
- Metro Rail Transit v Gammon Philippines GR200401 January17,2018 MAIN: https://lawphil.net/judjuris/juri2018/jan2018/gr_200401_2018.html Lost-profit proof and net profit estimate.
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