The Steak ’n Shake restaurant chain entered a contract with Pepsi to replace King Cola with Pepsi in all its stores. Several issues surrounding the contract’s execution strained the agreement, and Steak ’n Shake canceled the contract and refused to perform. Pepsi sued, and in court Steak ’n Shake insisted that Pepsi had no “legally cognizable” damages because all potential profits were purely speculative. Pepsi argued that it stood to gain from the contract and should be compensated for the breach even though damages could not be calculated exactly. The damages could be equal to what it reasonably stood to gain from the contract if not for Steak ’n Shake’s breach.

CASE QUESTIONS

1. Will a court award damages to Pepsi even though the company admitted the damages could not be calculated exactly?

2. What other types of damages or relief could Pepsi seek?