Can I Sue For Lost Opportunity?

Loss of opportunity damages compensate you for a real chance to make money (or avoid a loss) that someone else’s breach of contract, misleading conduct or negligence took away. So yes, you can sue for a lost opportunity in Australia. The catch is that the court pays you for the value of the chance, not the full profit you were hoping for.

Here’s the frustrating bit. The opportunity you lost is usually worth far more than your out-of-pocket costs, and it’s also the hardest part of any claim to prove. Most people only start pulling together evidence when a lawyer asks for it, months after the emails have gone cold. Start now and you’re already ahead.

What does loss of opportunity mean?

In plain English, a lost opportunity is a chance you had and no longer have because someone else did the wrong thing. A tender you were shortlisted for. A distributor who was about to sign. An option to renew a lease that quietly expired because your landlord misled you about the dates.

In law, the phrase does a second job. Loss of opportunity (also called loss of chance) is a head of damage, meaning a category of loss a court can put a dollar figure on. It sits inside compensatory damages, alongside things like wasted costs and lost profits.

Most business owners assume “lost opportunity” means “the profit I would have made. It doesn’t. That’s a lost profits claim, and to win it you have to prove, on the balance of probabilities, that the profit would actually have landed. If you can, you recover the lot.

A loss of opportunity claim works differently. It’s built for situations where the outcome depended on something nobody can prove, such as whether a third party would have said yes. The High Court drew this line in Sellars: things that already happened are proved on the balance of probabilities, while hypothetical outcomes are valued by how likely they were. That’s the whole trick of this area of law.

When can you claim loss of opportunity damages in Australia?

There’s no standalone “loss of opportunity” lawsuit. You claim loss of opportunity damages as part of another cause of action, and which one you use changes the rules. For small businesses, three routes matter.

Breach of contract

When the other party breaks the contract, you’re entitled to be put in the position you’d have been in if they’d performed. Sometimes that position includes a chance, not a certainty. The classic Australian example is Commonwealth v Amann Aviation (1991), where the High Court valued an aviation company’s lost chance of having a government surveillance contract renewed after the Commonwealth wrongly terminated it.

Picture a smaller version. Your supplier fails to deliver stock before a major trade show, and three retailers you’d lined up walk away. You can’t prove all three would have ordered. You can prove there was a real chance they would, and that chance has a value.

Two limits apply. The loss must be something both parties could reasonably have contemplated when you signed (if your supplier had no idea about the trade show, you’ll struggle). And the contract itself might exclude the loss, which we cover below. If you’re unsure whether you even have a breach yet, our guide to what happens when a contract is broken walks through the remedies.

Misleading or deceptive conduct

Section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) bans misleading or deceptive conduct in trade or commerce. Section 236 then lets you recover loss or damage you suffered because of that conduct. Sellars itself was a misleading conduct case: the plaintiffs recovered the value of a commercial deal they lost after relying on a misleading representation.

You don’t need to show the other side meant to mislead you. You do need a causal link. In practice that means showing you relied on what you were told (or that the conduct otherwise caused your loss) and that you gave up or missed something real as a result. Our list of examples of misleading or deceptive conduct shows how broad the ban is.

Silence counts too. Where you’d reasonably expect someone to speak up, keeping quiet about a known problem can be misleading. The NSW Court of Appeal has allowed a property developer to recover lost development profit from a consultant who certified a defective design, even though the developer’s loss flowed through the builder rather than directly. The key finding was that the loss of opportunity was foreseeable in a general way.

One trade-off to know about: a court can reduce your damages if you failed to take reasonable care of your own interests, and responsibility can be split between several wrongdoers under proportionate liability rules. Blind faith in a sales pitch isn’t a winning strategy.

Negligence and personal injury (where the rules change)

This is where the old version of this article went wrong, so let’s be direct. For commercial losses caused by negligence (say, a financial adviser’s careless advice kills a deal), loss of chance arguments can still work. For medical negligence, they mostly don’t.

In Tabet v Gett (2010), the High Court refused to compensate a patient for the lost chance of a better medical outcome. You have to prove the negligence probably caused the injury. A lost 40% chance of avoiding harm isn’t enough on its own.

Personal injury claims for lost income run on a different track altogether. Take David, a construction worker with 20 years in heavy manual roles who can’t return to the trade after a car accident caused by another driver. His claim is for past lost wages and loss of future earning capacity. It isn’t a loss of opportunity claim, and it’s shaped by state Civil Liability Acts and motor accident schemes. In NSW, for example, a court must ignore any weekly earnings above three times average weekly earnings when it calculates economic loss.

Lost opportunity, lost profits or loss of earnings: which are you claiming?

Getting the label right matters more than most people expect. Claim loss of chance when you could prove lost profits outright, and you leave money on the table. Claim lost profits when you can’t prove them, and you might walk away with nominal damages (often a token sum). Lawyers regularly plead both in the alternative for exactly this reason.

Type of loss	What you’re compensated for	What you have to prove	Typical situation
Lost profits	The full profit you would have made	The profit would probably have been earned (more than 50% likely)	A signed customer contract you couldn’t fulfil because a supplier failed to deliver
Loss of opportunity	The value of a chance, discounted by its odds	A real, non-speculative chance existed and the wrong destroyed it	A tender, pitch or negotiation that depended on someone else’s decision
Wasted expenditure	Money you spent relying on the deal	You spent it because of the contract or representation	Fit-out costs for a franchise that never opened
Loss of earnings and earning capacity	Wages lost and reduced future ability to earn	An injury caused by the defendant affected your capacity to work	A tradesperson injured in a car accident

How are loss of opportunity damages calculated?

Courts follow a three-step test, set out neatly by the Victorian Court of Appeal in Masters Home Improvement v North East Solutions (2017):

1. Was there a chance of some value? It has to be more than speculative or negligible. A “blue sky” dream doesn’t qualify.
2. Was that chance lost? Would you actually have pursued it if the wrong hadn’t happened?
3. What was it worth? The court estimates the value of the opportunity if it had succeeded, then discounts it by the prospects of success. Lawyers call this the Sellars discount.

A worked example

A commercial joinery business is one of three firms shortlisted for a two-year council fit-out contract. Its expected net profit on the job is $240,000. A key subcontractor promised in writing to hold capacity for the job, then took a bigger project instead, a week before the tender closed. The joinery business had to withdraw.

Could it prove it would have won? No. Three shortlisted firms means nobody can. But the evidence shows a strong price and a good track record with this council, and the court puts its chances at 35%.

• Value of the opportunity: $240,000 net profit
• Sellars discount: 35% chance of success
• Value of the lost chance: $240,000 × 35% = $84,000
• Less profit earned on a smaller job it took with the freed-up workshop time: $20,000
• Loss of opportunity damages: $64,000

Notice two things. The business recovered with only a 35% chance, well under the balance of probabilities. And the mitigation deduction came straight off the top, which is why keeping records of what you did next matters as much as records of what you lost.

Here’s how the same $240,000 opportunity plays out at different odds:

Court’s assessment of the chance	Value of the lost chance	What it tells you
2%	Likely nothing	Too speculative to count as a chance of “some value”
10%	$24,000	A long shot, but real and compensable
35%	$84,000	Below 50% and still worth pursuing
60%	$144,000	Consider whether you can prove lost profits outright instead
85%	$204,000	A lost profits claim for the full amount is probably open

Three calculation traps

Revenue isn’t profit. Courts deduct the costs you’d have incurred to earn the money. Claiming gross contract value is the fastest way to lose credibility with a judge.

Long forecasts get discounted harder. A lost opportunity that would have paid out over ten years attracts a bigger discount for uncertainty than one that would have paid out next quarter.

Don’t discount twice. Forensic accountants warn against baking risk into the cash flow model and then letting the court apply its Sellars discount on top. If your expert has already stripped out the uncertainty, say so.

What evidence do you need for a loss of opportunity claim?

You have to prove the chain of events up to the point where you had a substantial prospect of getting the benefit. That part is on the balance of probabilities. Only the final “would it have worked out?” question gets the percentage treatment. So the evidence has to carry you right up to the door.

• Proof the opportunity existed: shortlist emails, term sheets, purchase orders, draft agreements, meeting notes, a customer’s written “we’re keen to proceed”.
• Proof you’d have taken it: board minutes, finance approvals, staffing plans, anything showing you were ready and willing.
• Proof of what it was worth: historical margins, comparable deals, pipeline conversion rates, and for bigger claims, a forensic accountant’s report.
• Proof of the link: for misleading conduct, what you were told, when, by whom, and what you did because of it.
• Proof you limited the damage: quotes from replacement suppliers, other customers you approached, jobs you took instead.

Here’s the thing most founders miss. A forecast you built before the dispute is gold. A spreadsheet built after the dispute, to justify a number, carries far less weight. If your pre-dispute projections exist, find them today.

What can stop or shrink a loss of opportunity claim?

A strong chance with solid evidence can still come to nothing. These are the usual reasons.

Exclusion clauses and liability caps

Commercial contracts routinely exclude “indirect or consequential loss“, and many list “loss of profit, revenue or opportunity” by name. If your contract says that, your claim might be over before anyone values the chance. Australian courts read these phrases by their ordinary meaning in context, and the Victorian Court of Appeal has read “consequential loss” more broadly than English courts do. The wording decides it.

Then there’s the cap. A common limitation of liability clause limits total damages to the fees paid over the previous 12 months. On a small services contract, that can turn a six-figure lost opportunity into a four-figure payout.

Misleading conduct claims are harder to contract out of. You can’t exclude liability under section 18 of the Australian Consumer Law, and an “entire agreement” clause won’t always protect a business that misled you before you signed. If a pre-contract promise is what cost you the opportunity, this route is worth a close look.

Remoteness, mitigation and your own conduct

In contract, the loss has to be the kind both sides could have contemplated at signing. You also have a duty to take reasonable steps to reduce your loss. Sitting back while it grows will cost you.

What you do after the breach counts too. Keep performing and saying nothing, and you might affirm the contract and lose the right to terminate. Walk out too early, and you might become the party in breach. Both mistakes turn up in Lawpath consultations far more than you’d expect.

Time limits

Miss the limitation period and the claim is gone, however strong it was. Contract claims run from the date of the breach. Claims under section 236 of the Australian Consumer Law run for six years from when you suffered the loss, in every state and territory.

State or territory	Breach of contract	Misleading conduct (ACL s 236)	Personal injury
NSW	6 years	6 years	3 years from discoverability (12-year long-stop)
VIC	6 years	6 years	3 years from discoverability (12-year long-stop)
QLD	6 years	6 years	3 years
WA	6 years	6 years	3 years
SA	6 years	6 years	3 years
TAS	6 years	6 years	3 years
ACT	6 years	6 years	3 years
NT	3 years	6 years	3 years

Workers compensation and motor accident schemes have their own, much shorter notice deadlines, sometimes measured in months. If an injury is involved, check those first.

What we see in Lawpath consultations

Lawpath lawyers speak with small business owners about lost deals, lost clients and lost income every week. A few patterns come up again and again.

The exclusion clause decides the claim before the maths does. A common scenario: a service provider makes a mistake, their client loses a customer, and the client demands a year of lost revenue. When our lawyers review the services agreement, the answer often sits in two clauses. One excludes indirect or consequential loss. The other caps liability at 12 months of fees. Read those first, whichever side you’re on.

A valid notice beats a bad motive. Business owners are understandably furious when a tenant, contractor or partner lies about their plans and then leaves. But if the other side gave the notice the contract required, the reason they left rarely matters, and future income isn’t recoverable unless the contract provides for it. A lie only becomes actionable when it’s a representation you relied on to your detriment.

A friendly “pause” letter can cost you the claim. We regularly see owners send a conciliatory email to keep things calm, not realising it could be read as affirming the contract. That can weaken a later argument that the other side repudiated it. The fix is simple: reserve your rights in writing, every time.

Walking away flips you into the defendant’s seat. Subcontractors who stop work after delays and non-payment often assume the contract has ended. Usually it hasn’t. Delays tend to create extensions of time, not exit rights, and leaving the site can expose you to damages and liquidated damages claims of your own.

Big numbers need boring evidence. Owners going into mediation frequently put a round figure on lost income without the records behind it. The claims that settle well come with calendars, invoices, bank statements and an accountant’s confirmation of normal earnings. Our lawyers also flag the cost risk early: if mediation fails and you litigate and lose, you can end up paying the other side’s legal costs.

What should you do first if you’ve lost an opportunity?

You don’t need to have the whole claim worked out today. You do need to stop the position getting worse. Work through these in order.

1. Don’t retaliate or walk away. Keep performing your side of the contract unless a lawyer has confirmed you can stop.
2. Put the breach in writing and reserve your rights. A notice to remedy breach of contract sets out the problem, the fix you expect and the deadline, and it creates a clean paper trail.
3. Lock down the evidence. Export emails, save messages, screenshot the tender portal, and find your pre-dispute forecasts.
4. Read four clauses. Exclusions, liability cap, notice requirements and dispute resolution. Many contracts require negotiation or mediation before court.
5. Put a rough number on it. Value of the opportunity, multiplied by a realistic chance, less anything you earned instead.
6. Make a formal demand. Our guide on how to write a letter of demand covers the structure. Most disputes settle at or before this stage.
7. Try low-cost mediation. Small business commissioners in NSW, Victoria, Queensland and other states run mediation for business disputes at a fraction of court costs.
8. Get advice before you terminate. A notice to terminate contract sent at the wrong time, or without a proper basis, can make you the party in breach.

How do you protect your business from loss of opportunity claims?

Flip the question around. If you’re the supplier, contractor or consultant, your exposure to someone else’s lost opportunity can dwarf the fee you charged. A few drafting choices make a big difference.

• Name the loss. Don’t rely on the phrase “consequential loss” alone. If you want to exclude lost profit, revenue and opportunity, say so expressly.
• Cap it sensibly. Tie total liability to fees paid over a set period, with a fixed fallback amount for small engagements.
• Give yourself set-off and termination rights. Businesses that use subcontractors increasingly add clauses letting them withhold payment to cover losses if a client contract is lost through the subcontractor’s misconduct or poor performance.
• Use liquidated damages for delay. A pre-agreed daily rate gives both sides certainty, as long as it’s a genuine estimate and not a penalty.
• Watch what your sales team promises. Contract clauses won’t save you from misleading pre-contract statements about capacity, timelines or exclusivity.

Frequently asked questions

Can I sue for lost opportunity in Australia?

Yes. You can claim loss of opportunity damages as part of a breach of contract, misleading or deceptive conduct, or commercial negligence claim. You need to show a real chance of some value existed and that the other party’s wrong destroyed it. The court then values the chance, not the full outcome.

What does loss of opportunity mean in law?

It’s a type of compensatory damage for losing a chance to gain a benefit or avoid a detriment. Courts use it where the outcome depended on something unprovable, like a third party’s decision. You’re compensated for the chance itself, discounted by how likely it was to succeed.

How much compensation can I get for a lost opportunity?

Courts estimate the net profit or benefit the opportunity would have delivered, then multiply it by the percentage chance it would have happened. A $100,000 opportunity with a 40% chance is worth about $40,000, less anything you earned or saved by mitigating your loss.

Can I claim if my chance of success was less than 50%?

Yes. Since Sellars v Adelaide Petroleum (1994), Australian courts compensate a lost chance below 50%, as long as it was real and not speculative or negligible. A 20% chance of winning a valuable contract can still be worth pursuing.

Is loss of opportunity the same as consequential loss?

Not exactly, but they overlap. Loss of opportunity is a way of measuring loss. Consequential loss is a label contracts use to exclude certain losses. Whether your lost opportunity falls inside an exclusion depends on the clause’s wording, so read your contract before you calculate anything.

Can I sue for loss of earnings after an injury?

Yes, but that’s a claim for lost wages and loss of earning capacity, not loss of opportunity. It’s governed by your state’s Civil Liability Act, workers compensation or motor accident scheme, each with its own caps and deadlines. Some schemes require notice within months, so act quickly.

Do I need a written contract to claim loss of opportunity damages?

No. Verbal and email agreements can be binding, and misleading conduct claims under the Australian Consumer Law don’t need a contract at all. Written terms make the claim far easier to prove, though, because they show what each side promised and contemplated.

How long do I have to make a loss of opportunity claim?

Six years for breach of contract in every state and territory except the Northern Territory, where it’s three. Misleading conduct claims under section 236 of the Australian Consumer Law have six years from when you suffered the loss. Personal injury claims have three years.

Can I claim a lost opportunity for a tender I didn’t win?

Only if someone’s wrong caused you to lose your chance, such as a partner breaching an exclusivity promise or a supplier misleading you about capacity. Simply losing a fair tender isn’t compensable. Shortlist status, feedback and your past win rate help show your chance was real.

Do I need a lawyer for a loss of opportunity claim?

For small claims, you can start with a notice to remedy and a letter of demand yourself. Once the claim involves valuing a chance, exclusion clauses or termination, a short consultation is worth it. Getting the label or the timing wrong can cost you more than the advice.

You’re in a stronger position than you think

Losing a deal you’d worked hard for stings, and it’s normal to want to either fire off an angry email or bury the whole thing. Neither helps. The business owners who recover the most are simply the ones who reserved their rights early, kept their records and got a clear view of their contract before making their next move.

You can do all three this week. Book a call through Lawpath’s Legal Advice Plan and get a lawyer to tell you what your lost opportunity is worth before the evidence goes cold.