Donna and Alan Smith wanted to raise emus, which are flightless Australian birds that look like ostriches. The creatures reproduce rapidly in almost any terrain and are sold for their meat, which is high in protein and low in fat, and for their oil, leather, and feathers. The Smiths paid Tomie Clark, the manager of Penbridge Farms, $4,000 as a down payment for a “proven breeder pair.” Since it is impossible to discern an emu’s gender by looking, the Smiths asked Clark several times if the two birds were male and female, and he assured them that the pair had successfully produced chicks the previous breeding season.

The Smiths placed the prospective lovebirds in the same pen, but the breeding season passed without a hint of romance. Donna Smith phoned Penbridge Farms, which advised her on a procedure used to determine gender. Donna performed this task and learned that the emus were both gentlemen. The would-be breeders asked for their money back but Penbridge refused, so the Smiths flew into court. The trial judge awarded the couple $105,215, representing lost profits from their anticipated chicks. Penbridge appealed, arguing that a buyer cannot count her chicks before they have hatched.

Questions:

1. Did the trial court err by awarding lost profits?

2. What are incidental damages?

3. What are consequential damages?