Deposition preparation in a commercial contract dispute focuses on the but-for revenue, the incremental cost treatment, the damages period, and the discount rate. Opposing counsel will test whether the revenue projection rests on the contract terms and the business's history or on the business's hopes, whether costs treated as fixed would in fact have been avoided, whether replaced revenue was credited, and whether the discount rate reflects the risk of the lost profits. The economist should be able to trace every figure to the ledger, the contract, or the pre-dispute projections and to show the result under alternative cost and period assumptions.
Checklist
Confirm the but-for revenue ties to the contract terms, historical results, and pre-dispute projections
Review the incremental cost treatment account by account against the ledger
Verify that post-breach replacement revenue was credited
Confirm the damages period matches the claim and the contract's remaining term
Prepare the economist to explain the discount rate and the risk it reflects
Questions to ask the economist
What supports the but-for revenue, and how does the result change under the historical growth rate alone?
Which costs did you treat as incremental, and what in the ledger supports each?
How did you account for revenue the business replaced after the breach?
Why did you select this discount rate for the lost profits?
Timeline
One to two preparation sessions in the two weeks before the deposition, after the report and the financial records are final.
Required documents
The final report with the revenue, cost, and present value schedules
The contract, pre-dispute projections, and the general ledger detail relied on
Post-breach financial results
The opposing expert's report
Common pitfalls
Projecting but-for revenue from a growth rate the business never achieved
Treating costs as fixed that the ledger shows varying with volume
Applying a risk-free discount rate to profits that carried business risk without explaining why
How does the economist defend the incremental cost treatment?
By showing, account by account, how each cost behaved with volume in the business's own records before the breach. Costs that moved with revenue are treated as incremental and deducted; costs that did not are not. The ledger analysis is the support, and the report shows the margin under alternative treatments.
How does the economist prepare for questions about causation?
By separating the loss caused by the breach from the effects of other events in the same period: market conditions, the business's own decisions, or a lost customer unrelated to the contract. The report states what was attributed to the breach and why, and the preparation session covers how the result changes if part of the decline is assigned elsewhere. The economist does not opine on whether the breach occurred.
What should be produced from the economist's file?
The report, the revenue and cost schedules, the general ledger extracts and management reports relied on, the pre-dispute projections, the post-breach results, and the sources for the discount rate. Because the incremental cost treatment rests on the ledger, the account-level analysis should be in the file in the form the economist used it. Counsel confirms what the disclosure rules and any protective order require.
References
American Institute of Certified Public Accountants. (n.d.). Statement on Standards for Valuation Services (VS Section 100). AICPA & CIMA. Retrieved August 27, 2026. aicpa-cima.com
U.S. Department of the Treasury. (n.d.). Daily Treasury par yield curve rates. home.treasury.gov