Branch, J.

1. The operation in question consisted in the removal of a considerable quantity of scar tissue from the palm of the plaintiff’s right hand and the grafting of skin taken from the plaintiff’s chest in place thereof. The scar tissue was the result of a severe burn caused by contact with an electric wire, which the plaintiff received about nine years before the time of the transactions here involved. There was evidence to the effect that before the operation was performed the plaintiff and his father went to the defendant’s office and that the defendant in answer to the question, “How long will the boy be in the hospital?”, replied, “Three or four days, . . . not over four; then the boy can go home, and it will be justafewdayswhenhe will be able to go back to work with a perfect hand.” Clearly this and other testimony to the same effect would not justify a finding that the doctor contracted to complete the hospital treatment in three or four days or that the plaintiff would be able to go back to work within a few days thereafter. The above statements could only be construed as expressions of opinion or predictions as to the probable duration of the treatment and plaintiff’s resulting disability, and the fact that these estimates were exceeded would impose no contractual liability upon the defendant. The only substantial basis for the plaintiff’s claim is the testimony that the defendant also said before the operation was decided upon, “ I will guarantee to make the hand a hundred per cent perfect hand” or “a hundred per cent good hand.” The plaintiff was present when these words were alleged to have been spoken, and if they are to be taken at their face value, it seems obvious *116that proof of their utterance would establish the giving of a warranty in accordance with his contention.

The defendant argues, however, that even if these words were uttered by him, no reasonable man would understand that they were used with the intention of entering into any “contractual relation whatever,” and that they could reasonably be understood only “as his expression in strong language that he believed and expected that as a result of the operation he would give the plaintiff a very good hand.” It may be conceded, as the defendant contends, that before the question of the making of a contract should be submitted to a jury, there is a preliminary question of law for the trial court to pass upon, i. e. “whether the words could possibly have the meaning imputed to them by the party who founds his case upon a certain interpretation,” but it cannot be held that the trial court decided this question erroneously in the present case. It is unnecessary to determine at this time whether the argument of the defendant based upon “common knowledge of the uncertainty which attends all surgical operations” and the improbability that a surgeon would ever contract to make a damaged part of the human body “ one hundred per cent perfect” would, in the absence of countervailing considerations, be regarded as conclusive, for there were other factors in the present case which tended to support the contention of the plaintiff. There was evidence that the defendant repeatedly solicited from the plaintiff’s father the opportunity to perform this operation, and the theory was advanced by plaintiff’s counsel in cross-examination of defendant, that he sought an opportunity to “experiment on skin grafting” in which he had had little previous experience. If the jury accepted this part of plaintiff’s contention, there would be a reasonable basis for the further conclusion that if defendant spoke the words attributed to him, he did so with the intention that they should be accepted at their face value, as an inducement for the granting of consent to the operation by the plaintiff and his father, and there was ample evidence that they were so accepted by them. The question of the making of the alleged contract was properly submitted to the jury.

2. The substance of the charge to the jury on the question of damages appears in the following quotation: “If you find the plaintiff entitled to anything, he is entitled to recover for what pain and suffering he has been made to endure and what injury he has sustained over and above the injury that he had before.” To this instruction the defendant seasonably excepted. By it, the jury was permitted to consider two elements of damage, (1) pain and suffering due to the *117operation, and (2) positive ill effects of the operation upon the plaintiff’s hand. Authority for any specific rule of damages in cases of this kind seems to be lacking, but when tested by general principle and by analogy, it appears that the foregoing instruction was erroneous.

“By ‘damages’ as that term is used in the law of contracts, is intended compensation for a breach, measured in the terms of the contract.” Davis v. Company, 77 N. H. 403, 404. The purpose of the law is to “put the plaintiff in as good a position as he would have been in had the defendant kept his contract.” 3 Williston, Cont., s. 1338; Hardie &c. Co. v. Company, 150 N. C. 150. The measure of recovery “is based upon what the defendant should have given the plaintiff, not what the plaintiff has given the defendant or otherwise expended.” 3 Williston, Cont., s. 1341. “The only losses that can be said fairly to come within the terms of a contract are such as the parties must have had in mind when the contract was made, or such as they either knew or ought to have known would probably result from a failure to comply with its terms.” Davis v. Company, 77 N. H. 403, 404; Hurd v. Dunsmore, 63 N. H. 171.

The present case is closely analogous to one in which a machine is built for a certain purpose and warranted to do certain work. In such cases, the usual rule of damages for breach of warranty in the sale of chattels is applied and it is held that the measure of damages is the difference between the value of the machine if it had corresponded with the warranty and its actual value, together with such incidental losses as the parties knew or ought to have known would probably result from a failure to comply with its terms. Hooper v. Story, 155 N. Y. 171, 175; Adams etc. Co. v. Wimbish, 201 Ala. 548; Isaacs v. Company, 108 Kan. 17; Paducah etc. Co. v. Proctor, 210 Ky. 806; Pioneer etc. Co. v. McCurdy, 151 Minn. 304; Christian &c. Co. v. Goodman, 132 Miss. 786; Hardie &c. Co. v. Company, 150 N. C. 150; York Mfg. Co. v. Company, 278 Pa. St. 351; General Motors &c. Co. v. Company, 47 R. I. 88; Cavanagh v. Company, 24 S. D. 349; Foutty v. Company, 99 W. Va. 300. The rule thus applied is well settled in this state. “As a general rule, the measure of the vendee’s damages is the difference between the value of the goods as they would have been if the warranty as to quality had been true, and the actual value at the time of the sale, including gains prevented and losses sustained, and such other damages as could be reasonably anticipated by the parties as likely to be caused by the vendor’s failure to keep his agreement, and could not by reasonable care on the part of the vendee have been avoided.” Union Bank v. Blanchard, 65 N. H. 21, *11823; Hurd v. Dunsmore, supra; Noyes v. Blodgett, 58 N. H. 502; P. L., c. 166, s. 69, vii. We, therefore, conclude that the true measure of the plaintiff’s damage in the present case is the difference between the value to him of a perfect hand or a good hand, such as the jury found the defendant promised him, and the value of his hand in its present condition, including any incidental consequences fairly within the contemplation of the parties when they made their contract. 1 Sutherland, Damages, (4th ed.), s. 92. Damages not thus limited, although naturally resulting, are not to be given.

The extent of the plaintiff’s suffering does not measure this difference in value. The pain necessarily incident to a serious surgical operation was a part of the contribution which the plaintiff was willing to make to his joint undertaking with the defendant to produce a good hand. It was a legal detriment suffered by him which constituted a part of the consideration given by him for the contract. It represented a part of the price which he was willing to pay for a good hand, but it furnished no test of the value of a good hand or the difference between the value of the hand which the defendant promised and the one which resulted from the operation.

It was also erroneous and misleading to submit to the jury as a separate element of damage any change for the worse in the condition of the plaintiff’s hand resulting from the operation, although this error was probably more prejudicial to the plaintiff than to the defendant. Any such ill effect of the operation would be included under the true rule of damages set forth above, but damages might properly be assessed for the defendant’s failure to improve the condition of the hand even if there were no evidence that its condition was made worse as a result of the operation.

It must be assumed that the trial court, in setting aside the verdict, undertook to apply the same rule of damages which he had previously given to the jury, and since this rule was erroneous, it is unnecessary for us to consider whether there was any evidence to justify his finding that all damages awarded by the jury above $500 were excessive.

3. Defendant’s requests for instructions were loosely drawn and were properly denied. A considerable number of issues of fact were raised by the evidence, and it would have been extremely misleading to instruct the jury in accordance with defendant’s request number 2, that “ The only issue on which you have to pass is whether or not there was a special contract between the plaintiff and the defendant to produce a perfect hand.” Equally inaccurate was defendant’s request number 5, which reads as follows: “You would have to find, in order *119to hold the defendant liable in this case, that Dr. McGee and the plaintiff both understood that the doctor was guaranteeing a perfect result from this operation.” If the defendant said that he would guarantee a perfect result and the plaintiff relied upon that promise, any mental reservations which he may have had are immaterial. The standard by which his conduct is to be judged is not internal but external. Woburn &c. Bank v. Woods, 77 N. H. 172; McConnell v. Lamontagne, 82 N. H. 423, 425; Eleftherion v. Company, ante, 32. Defendant’s request number 7 was as follows: “If you should get so far as to find that there was a special contract guaranteeing a perfect result, you would still have to find for the defendant unless you further found that a further operation would not correct the disability claimed by the plaintiff.” In view of the testimony that the defendant had refused to perform a further operation, it would clearly have been erroneous to give this instruction. The evidence would have justified a verdict for aLf amount sufficient to cover the cost of such an operation, even if the theory underlying this request were correct.

4. It is unlikely that the questions now presented in regard to the argument of plaintiff’s counsel will arise at another trial, and, therefore, they have not been considered.

New trial.

Marble, J., did not sit: the others concurred.

GORSUCH, Circuit Judge.

Sprint Spectrum, L.P., does not dispute that it breached its contract with its former bill collector, Penncro Associates, Inc. Still, it offers two reasons why, in its view, the district court’s judgment for Penncro in excess of $17 million should be reversed. First, Sprint argues that the parties’ agreement precludes the sort of damages Penncro seeks. In their contract, the parties agreed to forego “consequential damages,” and Sprint urges us to find that the term, as defined by the parties’s agreement, includes any and all “lost profits”— whether flowing directly or consequentially from Sprint’s breach. Because all of Penncro’s claimed damages are lost profits, Sprint argues the district court’s judgment is fatally flawed. Secondly, and alternatively, Sprint contends that Penncro’s damages should be calculated on the basis of the work it was ready and able to perform, rather than on the basis of a fixed monthly fee, as the district court found. For its part, Penncro cross-appeals, arguing that it is entitled to an additional $6.5 million in damages. Penn-cro submits that the district court erred when it found that the company was able, by taking on new work after Sprint’s breach, to avoid losses in this amount.

We affirm the district court on all three questions presented to us. While parties to a contract may define their terms as they please — a duck may be a goose — we see no evidence that Sprint’s and Penn-cro’s definition of the term consequential damages was designed to embrace (and thus foreclose the award of) profits lost as a direct result of Sprint’s breach. Likewise, the plain and unambiguous language of the parties’ agreement obliged Penncro to provide Sprint with a fixed amount of available labor capacity, and required Sprint to pay for that capacity, whether utilized or not. Finally, we see no clear error in the district court’s finding that Penncro managed to avoid a modicum of the losses that Sprint’s breach imposed.

I

Originally, Sprint, a national telecommunications company, handled for itself the not-inconsiderable task of trying to collect from its cell phone customers behind on their monthly bills. Beginning in April 2002, however, it decided to “outsource,” contracting first with Penncro and subsequently with two additional vendors to assume the job. Under the terms of the parties’ agreements, customers with overdue Sprint accounts trying to make outgoing calls were automatically routed to centers run by one of the three vendors, based on which one had the shortest estimated wait time. Penncro’s employees introduced themselves as Sprint’s agents, informed callers that their accounts were past due, and attempted to collect monies owed to Sprint — a service known as first-party inbound collections work.1

A

The nature of the parties’ agreement was spelled out in four interrelated docu*1153ments: (1) a Master Services Agreement (“MSA”); (2) a Contract Order; (3) an attachment to the Contract Order (“Attachment A”); and (4) an Addendum to Attachment A.

The MSA contained certain generic terms and conditions Sprint employed with all vendors. It obligated neither party to perform and expressly indicated that the scope and specific terms of the services provided would be governed by contract orders. MSA § 2.2.

The Contract Order was just such a document, involving only Sprint and Penn-cro, and detailing the particular services, staffing levels, and compensation rates attending to the parties’ relationship. Under the terms of the Contract Order, Penncro agreed, among other things, to “maintain staffing levels” sufficient to provide Sprint with “80,625 productive hours” per month. Contract Order § C. A productive hour was defined as time spent by a fully trained Penncro employee handling calls, waiting for calls, training, or waiting due to system downtime. Id. § B. This amounted, more or less, to an agreement to maintain approximately 500 full-time call center employees at Sprint’s disposal.2 In exchange, Sprint agreed “to pay for 80,625 productive hours per month” at a rate of $22 per hour (less for training hours, more for overtime hours). Id. §§ B, C.3

The parties’ agreement anticipated a three-year commitment at these levels of service, but also anticipated that the number of “productive hours” could vary according to certain terms specified in Attachment A. In Attachment A, the parties set forth various performance metrics on which Penncro and other vendors were evaluated. Poor performance for three consecutive months could result in a reduction of “the number of productive hours requested by ... 20%.” Attachment A at 3. Six months of consecutive poor performance entitled Sprint to terminate the contract for cause. Id.; Contract Order § D; MSA § 5.3.

Sprint emailed the Addendum to Attachment A to Penncro in September 2002, several months into the parties’ relationship. A cover email outlined a number of changes to the parties’ incentive program effected by the Addendum, and the document was included as an email attachment. One change not outlined in the cover email, but made in the Addendum, was the removal of the word “guaranteed” before the reference to the number of productive hours outlined in Section C of the Contract Order — that is, the number of call center hours that Penncro promised to supply and for which Sprint promised to pay.4

*1154B

The presence or removal of the word “guaranteed” does not seem to have had much bearing on the parties’ performance, which was fraught with difficulty. Penn-cro endured considerable staffing problems and was for many months unable to retain sufficient employees to provide the number of productive hours required by the parties’ contract. The hours Penncro did provide, moreover, were of sufficiently poor quality to rank Penncro last among Sprint’s three vendors in several performance-categories for a number of months. Sprint, meanwhile, did not experience the call volume it had anticipated and so never called on Penncro to provide the contracted-for number of productive hours. From the beginning, Sprint and Penncro discussed the actual number of hours that Sprint needed and Penncro could provide, agreeing, for the time being, to have Penn-cro bill and Sprint pay only for the hours that Penncro actually supplied. At no time did the total hours (supplied, billed, or paid for) reach the 80,625 hours for which the parties had contracted. According to Penncro’s CEO, this arrangement was acceptable — neither party complained or took action under the contract — because both parties had difficulties performing, the contract was in its early stages, and the parties fully expected to meet their obligations over the contract’s three-year term. In September 2002, Sprint emailed Penncro to announce a unilateral reduction in the number of FTEs (and therefore productive hours) due to “lower than expected call volume.” Penncro voiced no objection.

As call volumes and the hours necessary to handle them waned, Sprint gave notice of its intent to terminate Penncro’s first-party inbound collections contract by letter dated January 17, 2003. The parties then entered a four-month ramp-down period during which the number of FTEs requested of Penncro was incrementally reduced. The reason Sprint gave for its action was that Penncro was in third place or below in six agreed performance measures for the six months from July 2002 through December 2002 — an event entitling Sprint to terminate the parties’ relationship for cause under Section D of the Contract Order.

As the parties were ramping down, and in spite of their prior performance problems, Sprint and Penncro entered into a new contract order for a different but related service — third-party outbound collections work (see supra note 1). Sprint asserted that it would not have given this new work to Penncro if Penncro was still performing under the parties’ initial, first-party inbound contract, as Sprint did not think Penncro capable of handling both tasks. Penncro also entered into two other contracts for third-party outbound collections work during the same time-period, one with AT & T and another with a utility company, American Water.

C

In November 2004, Penncro sued Sprint for breach of the parties’ first-party inbound collections contract in federal district court, invoking the court’s diversity jurisdiction. Penncro claimed that Sprint was liable for breach of contract as a matter of law because Sprint’s stated reason for termination was erroneous: Penncro was not in last place for the full six consecutive months necessary to justify termination under the parties’ contract. The district court agreed and entered summary judgment for Penncro on the question of liability.

For its part, Sprint itself chose to pitch its battle primarily on the field of damages and a three-day trial on damages followed, after which the district court issued a detailed 45-page ruling. During trial, Sprint *1155pointed to Section 13 of the MSA, which rules out the award of consequential damages and proceeds to define the term as “includ[ing], but ... not limited to, lost profits, lost revenues and lost business opportunities.” This language, Sprint submitted, prohibited either party from obtaining recovery of any and all lost profits. The district court disagreed, holding that the MSA forbids only “consequential” or “indirect” damages that are “beyond direct economic loss or ordinary loss of bargain damages,” thereby doing nothing to rule out of bounds lost profits suffered as a direct consequence of Sprint’s breach.

As a fallback argument, Sprint contended that any award of lost profits should be limited to the hours that Penncro’s employees actually worked or could have worked. Again the district court disagreed, holding that, in spite of the difficulties that both sides had in living up to their obligations under the contract, Sprint’s agreement constituted an unambiguous and “unqualified promise to pay for 80,625 productive hours per month without regard to whether it actually called upon Penncro to provide those hours.”

Based on these holdings, the district court awarded Penncro $17,136,612 in expectation damages: $53,109,386 in lost contractual revenues (lost profits), minus $28,307,302 in costs avoided by not having to perform and $7,665,472 in losses avoided due to the breach. Penncro contested many of these reductions, especially those concerning avoided losses. The district court found that, solely because of Sprint’s termination which freed up call-center capacity, Penncro was able to mitigate its losses by taking on new work for Sprint (the third-party outbound collections contract), AT & T, and American Water. Penncro disputed the court’s assessment, arguing that it easily could have handled the new work as well as Sprint’s existing first-party inbound collection work.

Both parties appeal. We turn first to Sprint’s appeal and then Penncro’s cross-appeal.

II

The proper construction of a contract is a question of law we review de novo. See In re Villa West Assocs., 146 F.3d 798, 802 (10th Cir.1998); Liggatt v. Employers Mut. Cas. Co., 273 Kan. 915, 46 P.3d 1120, 1125 (2002). Under Kansas law, which the parties agree controls this dispute, see MSA § 17.6, a contract is ambiguous if reading its plain language yields doubtful or conflicting meanings. Liggatt, 46 P.3d at 1125. However, ambiguity will only be found where the meaning is genuinely uncertain, and even then not until the language has been given a reasonable and practical construction in light of the contract as a whole. Id.; Decatur County Feed Yard, Inc. v. Fahey, 266 Kan. 999, 974 P.2d 569, 574 (1999). In determining whether or not a contractual ambiguity exists, moreover, we are obliged under

Kansas law to confine ourselves to the four corners of the contract. See Decatur County Feed Yard, Inc., 974 P.2d at 574; City of Wichita v. Sw. Bell Tel. Co., 24 F.3d 1282, 1287 (10th Cir.1994). Only after finding the presence of a contractual ambiguity may we look to extrinsic evidence-including the parties’ course of conduct-to construe the documents. Sw. Bell Tel. Co., 24 F.3d at 1287; Farrell v. Gen. Motors Corp., 249 Kan. 231, 815 P.2d 538, 546 (1991). It is with these standards fixed in mind that we approach the parties’ competing contentions.

A

1. Sprint begins its appeal by renewing its argument that Penncro imper-missibly seeks lost profits. Section 13 of the MSA forbids the recovery of “eonse-*1156quential damages,” specifying that they “include, but are not limited to, lost profits, lost revenues and lost business opportunities.” In Sprint’s parlance, this means that any lost profits are (forbidden) consequential damages. For several reasons, we are persuaded that Sprint’s interpretation is foreclosed by the unambiguous language of the MSA.

Section 13’s syntax alone propels us in this direction. The parties’ language is not unlike a doctor’s prescription that “You really should not eat fried foods— and this includes, but is not limited to, meat and potatoes.” Ordinary usage and common experience does not suggest that the patient should avoid all meat and potatoes, but only those that are parts or components of the initial, larger group of fried foods (say, chicken fried steak and french fries). The dictionary underscores the point. Webster’s defines the term “to include” as meaning “to place, list, or rate as a part or component of a whole or of a larger group, class, or aggregate.” Webster’s Third New International Dictionary 1143 (2002). The more general term informs the subsequently listed examples, not the other way around, and so lost profits here refer only to those that are “a part or component” of the larger group or class of consequential damages.

The common legal meaning of the terms involved confirms this reading. Direct damages refer to those which the party lost from the contract itself — in other words, the benefit of the bargain — while consequential damages refer to economic harm beyond the immediate scope of the contract.5 Lost profits, under appropriate circumstances, can be recoverable as a component of either (and both) direct and consequential damages.6 Thus, for example, if a services contract is breached and the plaintiff anticipated a profit under the contract, those profits would be recoverable as a component of direct, benefit of the bargain damages. If that same breach had the knock-on effect of causing the plaintiff to close its doors, precluding it from performing other work for which it had contracted and from which it expected to make a profit, those lost profits might be recovered as “consequential” to the breach. All of this is by way of saying that, under the circumstances we face here, a reading of Section 13 informed by the normal legal meaning of its terms suggests that it bars only the recovery of consequential lost profits, not direct lost profits. Section 13 says that no consequential damages are recoverable, “in-cludfing]” lost profits; it simply does not speak to direct damages, or to lost profits recoverable under such a theory.

A review of Section 12 of the MSA further strengthens our confidence about the parties’ meaning in Section 13. In Section 12, Sprint obligated Penncro to indemnify Spring against “all claims, damages, losses, liabilities, costs, expenses, and reasonable attorney’s fees” arising from claims by third parties for work performed by Penncro. MSA § 12.1. By using the phrase “all ... damages,” the parties manifested a clear intent to insulate Sprint from any damages, direct or indirect, claimed by third parties. When it came to insulating Sprint from liability to Penncro itself, however, the parties in the very next section precluded recovery only of the class of damages that are “consequential [or] indirect.” Id. § 13. When a contract uses different language in proximate and *1157similar provisions, we commonly understand the provisions to illuminate one another and assume that the parties’ use of different language was intended to convey different meanings. See Decatur County Feed Yard, Inc., 974 P.2d at 574 (before finding ambiguity, court must view contested language in light of the contract as a whole); cf. Sosa v. Alvarez-Machain, 542 U.S. 692, 712 n. 9, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004) (“[W]hen the legislature uses certain language in one part of the statute and different language in another, the court assumes different meanings were intended.”) (internal quotation and citation omitted); Rogers v. Shanahan, 221 Kan. 221, 565 P.2d 1384, 1386 (1976) (presuming that “the legislature intended a different meaning when it used different language ... in different parts of a statute”).

Finally, our understanding of the parties’ chosen language comports with how Kansas courts have interpreted similar terms. In Brennan v. Kunzle, 37 Kan. App.2d 365, 154 P.3d 1094, 1112-13 (2007), for example, a mortgage allowed the plaintiffs to recover expenses incurred to enforce the agreement, “including, but not limited to, reasonable attorneys’ fees.” The court held that this formulation authorized the recovery only of those attorneys’ fees incurred in pursuing remedies under the mortgage and simply did not speak, one way or the other, to other attorney’s fees, such as those incurred in defending counterclaims. The same logic applies here: Section 13 is all about consequential lost profits and does not tell us anything, one way or the other, about direct lost profits. Cf. Dikeman v. Nat’l Educators, Inc., 81 F.3d 949, 953 (10th Cir.1996) (allowing, in a statute where examples of a general term were listed, that the more general term limits the scope of the examples).7

2. Sprint responds by observing that parties are free to diverge from linguistic and legal norms and to define terms in their contracts as they see fit. This, Sprint contends, is what the parties did here, defining “consequential damages,” to encompass any lost profits, including those normally thought to derive directly from a party’s breach. And, to be sure, parties to a contract are free to define their terms in any manner they wish. Up may be defined as down, right as left, day as night. But, while the parties may depart from the meanings associated with ordinary English and existing law, courts will recognize and give effect to such private definitions only where the parties’ intention to deviate from common usage is manifest. See Cor-bin on Contracts § 24.8; Restatement (Second) of Contracts § 202(3)(a). That is, we are reluctant to shed ordinary meanings and presume unusual private ones without some clear indication that the parties wished us to do so. Here, we are directed to no textual indicia that the parties intended such a departure. Neither do we find Sprint’s proffered authority of much help to its cause. In many of the cases Sprint cites, lost profits were not, as here, placed in an illustrative list of the sorts of consequential damages excluded; instead, they were singled out as a separate and distinct category of forbidden damages.8 Sprint’s own authority thus il*1158lustrates how parties easily can manifest an intent to preclude lost profits of any stripe and highlights how Section 13, by contrast, simply failed to do so.9

B

Even if Penncro is entitled to direct lost profits, Sprint submits that it is not obliged under the parties’ agreement to pay for 80,625 productive hours per month when Penncro never provided (or was able to provide) that amount of labor. At the very least, Sprint urges us to find ambiguity in the contract on this point so that we might step outside the four corners of the document and examine extrinsic evidence, including the parties’ course of conduct during the contract’s “start up” period when they agreed to provide and pay for fewer hours of work.

Penncro responds that, while its willingness or ability to perform was an element of liability, liability is not contested and performance is irrelevant to the assessment of damages because the contract’s language unambiguously requires Sprint to pay for 80,625 productive hours per month. We are constrained to agree.

1. The relevant contract language provides flatly that Penncro “agrees to maintain staffing levels” and that Sprint agrees “to pay for” 80,625 productive hours per month. Contract Order § C. Sprint’s obligation to pay thus is not conditioned in any way on how many hours Penncro was actually able to provide. Instead, the parties entered into a bilateral contract in which Penncro promised to provide Sprint with, and Sprint promised to pay Penncro for, a fixed amount of labor. See, e.g., Heller v. Martin, 14 Kan.App.2d 48, 782 P.2d 1241, 1243 (1989) (In “a classic bilateral contract!,] • • • each [party] promises future performance in consideration for the other’s promise of future performance.”); cf. People’s Exchange Bank of Elmdale v. Miller, 139 Kan. 3, 29 P.2d 1079, 1081 (1934).

We acknowledge the apparent (at first blush, at least) inequity of this reading, as it affords Penncro damages for services it never rendered, and was unable to render. *1159But a somewhat gentler light is shone on our interpretation when one recognizes that the parties’ contract was one for capacity. Penncro agreed to “maintain staffing levels” at 80,625 productive hours, and a productive hour includes time spent waiting for calls. Contract Order §§ B, C. Neither Penncro’s obligation nor its compensation was dependant on the number of calls, if any, that Sprint actually routed to Penncro. In return, Sprint agreed to pay for this set amount of call center capacity, whether or not Penncro’s phones were ringing. Contract Order § C.

The terms of the parties’ incentive program, in Attachment A, confirm the point. As structured, the capacity hours agreed to by the parties could be changed only in the event of poor performance — and in no event by more than twenty percent. By contrast, under Sprint’s reading of the parties’ agreement, Sprint could reduce (or, presumably increase) the number of hours it sought from Penncro simply by making a phone call at the beginning of the month. Such a reading would make the agreement to reduce capacity only in the event of poor performance, and even then only by twenty percent, surplusage. Indeed, the entire incentive program would be meaningless if 80,625 hours were merely a forecast of the parties’ future work — rather than a binding capacity commitment on both sides — that Sprint could alter at its whim.

2. Sprint replies with three arguments. First, it stresses Penncro’s demonstrated inability to provide all the hours envisioned by the contract and the parties’ agreement to proceed in several months on different terms. But, having found the promise to pay for 80,625 hours of capacity to be unambiguous in the language of the contract itself, we are precluded by Kansas law from entertaining Sprint’s extrinsic evidence concerning the parties’ course of conduct. Farrell, 815 P.2d at 546. Of course, not every state is so restrictive on this score, see generally Farnsworth on Contracts § 7.12, but the parties deliberately contracted for application of Kansas law. Furthermore, the MSA explicitly prohibits modification of the contract’s terms except in writing, MSA § 17.15, so the parties themselves specifically agreed that there could be no modification of their obligations through the course of performance. Cf. Riley State Bank of Riley v. Spillman, 242 Kan. 696, 750 P.2d 1024, 1028 (1988) (holding that, where a clause required waiver to be in writing, course of conduct could not give rise to waiver).

Of course, Sprint’s arguments about Penncro’s failure to perform its end of the bargain could well have offered a good basis for contesting liability. See, e.g., Fusion, Inc. v. Neb. Aluminum Castings, Inc., 962 F.Supp. 1392, 1395 (D.Kan.1997) (discussing plaintiffs material breach proffered as a defense to a breach of contract claim). But Sprint long ago made the tactical decision not to contest liability on this or any other basis — such as mutual breach, anticipatory breach, mistake, fraud, or material misrepresentation — and its decision to hang its hat at trial solely on the nature and quantum of Penncro’s damages cannot be reconsidered on appeal. See Cortez v. Wal-Mart Stores, Inc., 460 F.3d 1268, 1276 (10th Cir.2005); Wilson v. Muckala, 303 F.3d 1207, 1215 (10th Cir.2002); see also Hill v. Kemp, 478 F.3d 1236, 1250-51 (10th Cir.2007).

Second, recognizing the weakness of its appeal to extrinsic evidence, Sprint argues that its obligation to pay only for hours that Penncro actually worked is manifest in the parties’ agreement itself, pointing us to Section 2.2 of the MSA. Section 2.2 indicates that “[t]he execution of a Contract Order ... is [Penncroj’s agreement to provide and Sprint’s agreement to accept and pay for Services and Deliverables *1160in accordance with this Agreement and the applicable Contract Order.... ” Rather than support Sprint’s position, however, this section merely confirms, as we have already indicated, that the MSA did not obligate either party to supply or purchase services, deferring the nature of the parties’ (possible) future obligations to the Contract Order. As the document itself explains, “Sprint has no obligation to accept and pay for Services or Deliverables that are not set forth in an executed Contract Order.” MSA § 2.2; see also supra Part I.A. And the Contract Order unambiguously reflects Sprint’s promise to pay for 80,625 productive hours.

Third, Sprint argues that the Addendum to Attachment A, which removed the term “guaranteed” before the words “productive hours outlined in Section C of the Contract Order” from Attachment A, commands its construction. Specifically, Sprint argues that the removal of the word “guaranteed” shows that, under the agreement in effect at the time of the breach, the number of productive hours were not, if they ever were, guaranteed by Sprint.

For its part, the district court refused to credit the removal of “guaranteed.” The court noted that Sprint made this change unilaterally, sending the Addendum as an email attachment to Penncro, and without even noting the alteration in its cover email which, notably, highlighted other changes. See supra Part I.A. But even assuming that the Addendum effectively modified Attachment A to remove the word “guaranteed,” the presence or absence of the word is immaterial to our conclusion that Sprint promised to pay for 80,625 hours of call center capacity. Attachment A, whether or not modified by the Addendum, merely sets out the details of the incentive plan Sprint used to evaluate its vendors. Under its terms, vendors can be rewarded for good performance by monetary bonuses, and they can be punished for poor performance by a reduction in productive hours. The performance plan, however, simply does not speak to the critical question before us — namely, the nature of the “productive hours” agreed to by the parties for alteration under Attachment A’s incentive plan. Put plainly, was “80,625 productive hours,” merely a forecast of demand? Or was it a fixed amount of labor capacity? Attachment A is mute on this dispositive question. Instead, it merely points the reader back to Section C of the Contract Order: In the event of poor performance, Attachment A says that Sprint “may permanently reduce the number of productive hours requested of [Penncro],” and “[t]his reduction will result in a corresponding reduction of the amount of productive hours outlined in Section C of the Contract Order.” Addendum at 3. Thus, under the terms of the incentive plan, the parties could modify Penncro’s promised productive hours outlined in Section C based on its success or failure under certain tests, but it simply does not speak to the nature (capacity v. forecast) of the productive hours promised in Section C.10

Ill

In calculating damages, the district court found that, after Sprint moved to terminate the parties’ first-party inbound collections contract, Penncro managed to avoid $7,665,472 in losses by taking on *1161work for AT & T and American Water, as well as third-party outbound collections work for Sprint. In its cross-appeal, Penncro does not challenge the district court’s finding that it had sufficient capacity to take on the new Sprint work only by virtue of Sprint’s termination of its initial contract. But Penncro does contest the district court’s conclusion that Penncro’s damages should be reduced by the amounts associated with its AT & T and American Water contracts, $6.5 million in all. In Penncro’s view, it easily could have handled these new jobs in addition to fulfilling its first-party inbound collections work for Sprint — and, thus, the amounts it earned from AT & T and American Water should not qualify as avoided losses. Accordingly, resolution of Penncro’s cross-appeal fairly hinges on the resolution of a single factual question: Could Penncro have taken on this additional work and still performed its initial contract with Sprint? Putting the point differently, was Penncro what contract law calls a lost volume seller? See Bill’s Coal Co., v. Bd. of Pub. Util. of Springfield, Mo., 887 F.2d 242, 245 (10th Cir.1989) (“A lost volume seller is one who has the capacity to perform the contract which was breached as well as other potential contracts,” without resource or capacity constraints.).

Whether a party to a contract is a lost volume seller is a question of fact. Rodriguez v. Learjet, Inc., 24 Kan.App.2d 461, 946 P.2d 1010, 1014 (1997). We therefore will not disturb the district court’s factual findings about Penncro’s ability to service AT & T, American Water, and its original Sprint contracts simultaneously unless they are clearly erroneous. For a factual finding to be clearly erroneous, it “must be more than possibly or even probably wrong; the error must be pellucid to any objective observer.” United States v. Cardenas-Alatorre, 485 F.3d 1111, 1118—19 (10th Cir.2007).

After extensive proceedings, the district court found that Penncro had the capacity to assume additional collections work only by virtue of Sprint’s contract termination — and, thus, that it was not a lost volume seller. The district court had before it ample evidence to support this conclusion. Unconstrained by the strictures against extrinsic evidence in this inquiry, the district court was able to observe and take full account of Penncro’s continual staffing difficulties and significant performance problems throughout the life of its first-party inbound contract with Sprint. It noted, too, that Penncro solicited and was awarded the AT & T contract expressly on the basis of the telecommunications experience it garnered from having worked for Sprint and on the understanding that those who had performed Sprint’s work would service AT & T’s contract. As to American Water, the district court found that its contract was awarded only after Sprint’s breach and all of the work was performed in the same facility where Sprint’s work had been performed; this allowed Penncro to let its leases at other facilities lapse and to reallocate existing resources to American Water’s work, thereby saving significant start-up and training costs.

To be sure, Penncro points to competing evidence and testimony from its employees suggesting that it had adequate capacity, or could have found adequate capacity, to cope with Sprint’s contract on top of the new work it received. But pointing to conflicting evidence inconsistent with the district court’s finding is insufficient, standing alone, to establish clear error, for “every trial is replete with conflicting evidence, and in a bench trial, it is the district court, which enjoys the benefit of live testimony and has the opportunity firsthand to weigh credibility and evidence, that has the task of sorting through and making sense of the parties’ competing narratives.” Watson v. United States, 485 F.3d *11621100, 1108 (10th Cir.2007). The district court, moreover, found Penncro’s evidence unpersuasive in several ways we find illuminating. For example, the district court discounted Penncro’s assertions that it had the capacity to handle AT & T’s work at a different facility because that contract had to be performed by the same personnel who handled Sprint’s work. The court also found that Penncro could not have performed the American Water contract at a different facility because Penncro could not have opened and staffed a new facility in time to take on American Water’s work. And the district court found that Penncro’s staffing woes throughout the life of its initial contract with Sprint spoke volumes to its capacity to take on additional work. Though reasonable factfinders might come to different conclusions on the facts associated with Penncro’s cross-appeal, we are persuaded that the district court considered them thoughtfully and came to a well-reasoned result free of clear error.

* * *

We hold that, in keeping with plain meaning and legal norms, where parties to an agreement exclude liability only for consequential damages, profits lost as a direct result of a breach may be recovered. As to the amount of profits lost, we hold that the parties’ fixed-capacity agreement obliged Sprint to pay for that amount of capacity, whether utilized or not. Finally, we discern no clear error in the district court’s finding in this case that Penncro avoided losses as a result of Sprint’s breach by taking on work from AT & T and American Water. Accordingly, we affirm the district court’s judgment to Penn-cro in the amount of $17,136,612. Sprint’s appeal on the award of attorneys’ fees is dismissed as moot.

HAMILTON, Circuit Judge.

Merry Gentleman, LLC produced the motion picture The Merry Gentleman, which was released, in 2009. Despite some critical acclaim, the film was a commercial flop. Merry Gentleman blames Michael Keaton, the film’s lead actor and director, for the bust. It brought this breach of contract action against Keaton and George and Leona Productions, Inc., Keaton’s “loan-out company” that he uses for professional contracting, alleging that Keaton violated his directing contract by (1) failing to prepare the first cut of the film in a timely fashion, (2) submitting a first cut that was incomplete, (3) submitting a revised cut that was not ready for the producers to watch, (4) communicating directly with officials at the Sundance Film Festival and threatening to boycott the festival if they did not accept his director’s cut instead of the producers’ preferred cut, (5) failing to cooperate with the producers during the post-production process, and (6) failing to promote the film adequately.

If the case were to go to trial, one might expect Keaton to dispute that any of these alleged breaches actually violated the directing contract. After all, Keaton completed the movie. It was accepted at the prestigious Sundance Film Festival. It received critical praise — Roger Ebert, for example, gave it 3.5 stars out of 4 and called it “original, absorbing and curiously moving.” And the film’s executive producer, Paul Duggan, admitted during his deposition that he was unaware of any director who did more publicity than Keaton did for a movie with a comparable budget.

Keaton moved for summary judgment, however, on the narrow ground that Merry Gentleman had failed to produce sufficient evidence that his alleged breaches of the directing contract caused it damages. For purposes of deciding this appeal, we must therefore assume as the district court did that Keaton in fact breached the contract.

Illinois law governs the directing contract. Under Illinois law, a “party injured by another’s breach or repudiation of a contract usually seeks recovery in the form of damages based on his ‘expectation interest,’ which involves obtaining the ‘benefit of the bargain,’ or his ‘reliance interest,’ which involves reimbursement for loss caused by reliance on a contract.” MG Baldwin Financial Co. v. DiMaggio, Rosario & Veraja, LLC, 364 Ill.App.3d 6, 300 *829 Ill.Dec. 601, 845 N.E.2d 22, 30 (2006), quoting Restatement (Second) of Contracts § 344 (1981). The district court granted Keaton’s motion for summary judgment, concluding that Merry Gentleman had failed to present a genuine issue of material fact on either damages theory.

First, the district court held that Merry Gentleman forfeited the expectation damages theory by not addressing it sufficiently in its response to summary judgment. Merry Gentleman, LLC v. George & Leona Productions, Inc., 76 F.Supp.3d 756, 761 (N.D.Ill.2014). Merry Gentleman does not dispute this conclusion on appeal, so expectation damages are out.

Second, the district court held that Merry Gentleman failed to produce evidence from which a reasonable trier of fact could find that Keaton’s alleged breaches caused the damages Merry Gentleman seeks: all $5.5 million it spent producing the movie. Id. at 761-66. This holding is the focus of Merry Gentleman’s appeal.

We review the grant of summary judgment de novo, reviewing the record in the light most favorable to Merry Gentleman, as the non-moving party, and drawing all reasonable inferences in its favor. E.g., Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871, 873-74, 2015 WL 4509935, at *2 (7th Cir.2015). Summary judgment is appropriate only where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).

Illinois follows the approach of § 349 of the Restatement (Second) of Contracts (1981), which provides that as an alternative to expectation damages, “the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would- have suffered had the contract been performed.” See, e.g., Herbert W. Jaeger & Associates v. Slovak American Charitable Ass’n, 156 Ill.App.3d 106, 107 Ill.Dec. 710, 507 N.E.2d 863, 868 (1987) (discussing § 349). Reliance damages are designed to put the injured party “in as good a position as [the injured party] would have been in had the contract not been made.” Restatement (Second) of Contracts § 344; MC Baldwin Financial, 300 Ill.Dec. 601, 845 N.E.2d at 30 (discussing § 344); Designer Direct, Inc. v. DeForest Redevelopment Auth., 313 F.3d 1036, 1049 (7th Cir.2002) (same).

Merry Gentleman argues that the district court required too much when it held that Merry Gentleman failed to establish a causal connection-between its expenditures on the film and Keaton’s alleged breaches. The causation standard is minimal when the injured party seeks reliance damages under § 349, Merry Gentleman .contends, and it cleared this low hurdle when it submitted an affidavit from Duggan stating that the production company spent over $5 million in reliance on the directing contract. Once it produced-that evidence, Merry Gentleman continues, the burden shifted to Keaton to prove that the production company would have suffered the alleged losses even if Keaton had fully performed. And.because Keaton did not submit evidence with his motion for summary judgment showing beyond reasonable dispute that these losses were inevitable, summary judgment against Merry Gentleman was improper. Or so goes the argument.

We agree with Merry Gentleman that a party seeking reliance damages under § 349 has a relatively low bar to clear to establish causation and that once it makes this showing, the burden shifts to the breaching party to prove any reduction in *830 those damages. This causation threshold is low because the injured party is forced to prove a counterfactual: what would have happened if the contract had not been, signed in the first place. See Autotrol Corp. v. Continental Water Systems Corp., 918 F.23 689, 695 (7th Cir.1990). Proving this kind of counterfactual is difficult because the value of performance can be so difficult to establish. That is especially true in cases where the injured party is seeking reliance damages. If damages were easy to calculate, the injured party likely would have sought expectation damages to begin with on a benefit-of-the-bargain theory under § 347. Reliance damages are appropriate precisely because the injured party is at an evidentiary disadvantage. Cf. Restatement (Second) of Contracts § 349, cmt. a (1981) (reliance damages are appropriate where the injured party “cannot prove his profit with reasonable certainty”). That is why courts use the burden-shifting framework of § 349. As Judge Hand explained long ago:

It is often very hard to learn what the value of the performance would have been; and it is a common expedient, and a just one, in such situations to put the peril of the answer upon that party who by his wrong has made the issue relevant to the rights of the other. On principle therefore the proper solution would seem to be that the promisee may recover his outlay in preparation for the performance, subject to the privilege of the promisor to reduce it by as much as he can show that the promisee would have lost, if the contract had been performed.

L. Albert & Son v. Armstrong Rubber Co., 178 F.2d 182, 189 (2d Cir.1949) (footnote omitted).

The burden does not shift to the breaching party until the injured party first satisfies this threshold showing of causation, however. And just because the causation threshold under § 349 is low does not mean it is not there, as Merry Gentleman seems to suggest. To oppose summary judgment on this point, the injured party must still produce evidence sufficient to permit a reasonable trier of fact to find that the losses claimed were caused by the breach. See Spitz v. Proven Winners North America, LLC, 759 F.3d 724, 730 (7th Cir.2014) (“To prevail on a breach of contract claim, a plaintiff must establish the existence of a valid and enforceable contract, plaintiffs performance, defendant’s breach of the terms of the contract, and damages resulting from the breach.”) (emphasis added); Avery v. State Farm Mutual Auto. Ins. Co., 216 Ill.2d 100, 296 Ill.Dec. 448, 835 N.E.2d 801, 832 (2005) (“basic theory of damages for breach of contract” requires plaintiff to prove “an actual loss or measurable damages resulting from the breach in order to recover”) (emphasis added); see also Old Stone Corp. v. United States, 450 F.3d 1360, 1375 (Fed.Cir.2006) (“[Rjeliance damages are subject to two pertinent limitations — the damages must have been both proximately caused by the breach, and foreseeable.”).

In the typical case where reliance damages are sought, the defendant has simply repudiated the contract and walked away from the deal. This causal link will be straightforward in those cases. As the district court explained, in such cases the non-breaching plaintiff is left “holding the bag after having made its expenditures.” Merry Gentleman, 76 F.Supp.3d at 763. In those cases, it is appropriate for the injured party to claim as damages all expenditures it made in preparation for performance because the other side failed to perform at all. In such cases, the complete loss of investment will often be the proximate result of the breach.

*831 But in cases like this one, where the breaching party has substantially performed and the alleged breaches have' to do with the quality of the final product, the causal link between reliance damages and the breach is not so direct. An injured party cannot reasonably claim that all of its expenditures were caused by the other party’s breach without some reason to think the breach destroyed the entire value of the breaching party’s performance. In this context, the breach does not cause the complete loss of investment.

Take this case, for example. Who can say why a critically praised movie did not make money? Merry Gentleman claims as damages all $5.5 million it spent to produce the movie. If Keaton had somehow prevented completion of the movie, Merry Gentleman might well have been entitled to all expenditures made in preparation for his performance (subject, of course, to the “losing contract” limitation in § 349). But here, Keaton actually made the movie. Merry Gentleman complains that Keaton slowed down the production process and failed to publicize the movie adequately after it was finished. No doubt, these services have economic value and, on a proper showing, Merry Gentleman might have been entitled to recover damages for these shortcomings. (Imagine, for instance, if Keaton’s tardiness in submitting the first cut forced Merry Gentleman to pay the film editors for a longer period. Or, to take a more extreme example, imagine if Keaton had publicly criticized the film released to theaters so harshly that no one bought tickets to see it.) But no reasonable trier of fact could find that Merry Gentleman lost its entire investment of $5.5 million because Keaton failed to submit his first cut on time or failed to publicize the movie better. Merry Gentleman entered the directing contract to have Keaton deliver a finished movie, and he delivered one that showed well at Sun-dance and won some critical praise. The breaches by Keaton that Merry Gentleman alleges cannot reasonably be said to have rendered the investment completely worthless.

The fundamental problem we have been describing is that Merry Gentleman’s damages theory is completely insensitive to the importance and severity of Keaton’s alleged breaches. This is how Merry Gentleman explained its damages theory in opposing summary judgment:

Keaton’s actions were in breach of his contract, and caused damage to MG LLC in that it was unable to screen and market the film of its choosing (as was its contractual right); in that it endured substantial additional costs; and in that in reliance on its expectation that Keaton would satisfy his contractual obligations, it spent millions of dollars to finance Keaton’s temper tantrum, money it never would have expended if it had been aware of Keaton’s unwillingness to conform his behavior to his contractual obligations.

That’s it. Merry Gentleman did not explain how Keaton’s cut differed from “the film of its choosing.” Nor did it explain how that difference caused it damage. It did not identify what it meant by “substantial additional costs.” And the last claim— that it never would have signed the contract if it had .known that Keaton would breach — is something almost any plaintiff can say in a breach-of-contract dispute.

The only evidence Merry Gentleman cited in support of these conclusory assertions were the following facts:

MG LLC spent over $5 million to produce the film, the vast majority of which was spent after Keaton entered into his directorial contract.

Had MG LLC known that Keaton would fail to meet his contractual obligations as *832 a director, including honoring MG LLC’s right to “sole discretion” over “business and creative decisions,” it would not have entered into the directorial contract with him, nor would it have expended millions of dollars with Keaton as the director.

Dkt. No. 79 at 24, ¶¶ 121-22 (internal record citations omitted). Again, Merry Gentleman made no effort to establish any causal connection between the particular breaches asserted — the failure to submit a first cut on time, submitting a revised cut that was incomplete, failing to publicize the film better, etc. — and the $5.5 million that Merry Gentleman spent on the production process as a whole. 1

We agree with the district court that Merry Gentleman, in seeking $5.5 million in reliance damages, “effectively wants to shift the entire cost — and risk — of producing The Merry Gentleman to Keaton for his alleged breaches, giving it a windfall and placing it in a better position than it would have been in had the contract never been signed.” Merry Gentleman, 76 F.Supp.3d at 766. Reliance damages are not insurance. Courts “will not ‘knowingly put the plaintiff [receiving a reliance recovery] in a better position than he would have occupied had the contract been fully performed.’ ” Bausch & Lomb Inc. v. Bressler, 977 F.2d 720, 729 (2d Cir.1992), quoting L.L. Fuller & William R. Perdue, Jr., The Reliance Interest in Contract Damages: 1, 46 Yale L.J. 52, 79 (1936); see also, e.g., V.S. Int’l, S.A. v. Boyden World Corp., 862 F.Supp. 1188, 1198 (S.D.N.Y.1994) (assuming for sake of argument that defendant breached contract but declining to award reliance damages: “Based on plaintiffs continued running of a successful business, any compensation for these initial expenses would not place plaintiffs in the same position as they were prior to the execution of the contract, as reliance damages are intended to do, but would instead constitute a windfall for plaintiffs.”).

As noted, we must assume here that Keaton breached the $100,000 contract as alleged, but these alleged breaches did not render his performance completely worthless. He directed the movie, it was accepted by Sundance, and it was released to the public. Reimbursing Merry Gentleman for all $5.5 million it spent, even though it received from Keaton a finished film praised by critics, would put it in a better position than if the contract had not been made. Perhaps Merry Gentleman might have been able to present a genuine issue for trial on a more modest damages theory, but it decided to shoot for the moon and missed. A reasonable trier of fact could not find that Keaton’s alleged breaches caused Merry Gentleman to sustain $5.5 million in damages. 2

*833 The district court’s judgment is AFFIRMED.

OPINION REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT BROUGHT SEPARATELY BY MICHAEL JORDAN AND WORLDCOM, INC.

ARTHUR J. GONZALEZ, Bankruptcy Judge.

INTRODUCTION

Before the Court are cross-motions for summary judgment separately brought by Michael Jordan (“Jordan”) and WorldCom, Inc. (hereafter referred to as the “Debtors” or “MCI”).

BACKGROUND

On or about July 10, 1995, Jordan and the Debtors entered into an endorsement agreement (the “Agreement”). At that time, Jordan was considered to be one of the most popular athletes in the world. The Agreement granted MCI a ten-year license to use Jordan’s name, likeness, “other attributes,” and personal services to advertise and promote MCI’s telecommunications products and services beginning in September 1995 and ending in August 2005. The Agreement did not prevent Jordan from endorsing most other products or services, although he could not endorse the same products or services that MCI produced. In addition to a $5 million signing bonus, the Agreement provided an annual base compensation of $2 million for Jordan. The Agreement provided that Jordan would be treated as an independent contractor and that MCI would not withhold any amount from Jordan’s compensation for tax purposes. The Agreement provided that Jordan was to make himself available for four days, not to exceed four hours per day, during each contract year to produce television commercials and print advertising and for promotional appearances. The parties agreed that the advertising and promotional materials would be submitted to Jordan for his approval, which could not be unreasonably withheld, fourteen days prior to their release to the general public. From 1995 to 2000, Jordan appeared in several television commercials and a large number of print ads for MCI.

On July 1, 2002, MCI commenced a case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the Bankruptcy Court for the Southern District of New York. On January 16, *6802008, Jordan filed Claim No. 11414 in the amount of $2 million plus contingent and unliquidated amounts allegedly due under the Agreement. On July 18, 2003, the Debtors rejected the Agreement as of that date, pursuant to § 365(a) of the Bankruptcy Code. Following that rejection of the Agreement, Jordan filed Claim No. 36077 (the “Claim”) in the amount of $8 million — seeking $2 million for each of the payments that were due in June of 2002, 2003, 2004, and 2005. MCI does not object to the Claim to the extent Jordan seeks $4 million for the 2002 and 2003 payments under the Agreement. As of the rejection in July 2003, two years remained under the Agreement.

The Parties’ Contentions1

MCI asserts two bases for disallowance of the Claim. One, MCI contends that the Agreement is an “employment contract” within the meaning of section 502(b)(7) of the Bankruptcy Code and that Jordan’s claim is “capped” pursuant to that section. Second, MCI argues that Jordan had an obligation to mitigate his damages and failed to do so. MCI argues that these two bases entitle it to summary judgment with respect to its objection to the Claim, and assert that either under section 502(b)(7) or as a result of Jordan’s failure to mitigate damages following the Debtors’ rejection, the Claim should be reduced to $4 million. MCI argues that it is under no obligation to pay Jordan for contract years 2004 and 2005.

Jordan argues for summary judgment allowing the Claim in full and overruling and dismissing MCI’s objections to the Claim. Jordan argues that because he was not an “employee” of MCI and because the Agreement was not an “employment agreement,” section 502(b)(7) does not apply to cap his claim. Regarding MCI’s mitigation argument, Jordan argues that the objection should be overruled and dismissed for three independent reasons (1) Jordan was a “lost volume seller” and thus mitigation does not apply, (2) there is no evidence that Jordan could have entered into a “substantially similar” endorsement agreement, and (3) Jordan acted reasonably when he decided not to pursue other endorsements after MCI’s rejection of the Agreement.

DISCUSSION

A. Summary Judgment Standard

Under Federal Rule of Civil Procedure 56(c), made applicable to this proceeding by Federal Rule of Bankruptcy 7056, summary judgment is only appropriate where the record shows that “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” See Fed. R. Civ. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists, where “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). In determining whether such an issue exists, “the court is required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought.” Stern v. Trustees of Columbia Univ., 131 F.3d 305, 312 (2d Cir.1997). The court’s role is “not to weigh the evidence or make determinations of credibility but to ‘determine whether there is a genuine issue for trial.’” Village of Kiryas *681Joel Local Dev. Corp. v. Ins. Co. of N. America, 996 F.2d 1390, 1392 (2d Cir.1993) (quoting Anderson, 477 U.S. at 249, 106 S.Ct. at 2511). It is well established that a party opposing a motion for summary judgment “may not rest upon mere conclusory allegations or denials.” See Colavito v. N.Y. Organ Donor Network, Inc., 438 F.3d 214, 222 (2d Cir.2006) (quoting Markowitz v. Republic Nat’l Bank of N.Y., 651 F.2d 825, 828 (2d Cir.1981)). When cross-motions for summary judgment are made, as here, courts use the same standard as for individual motions for summary judgment — each motion must be considered independently of the other and the court must consider the facts in the light most favorable to the non-moving party for each. See Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir.1993). In such a situation, the court is not required to grant judgment as a matter of law for one side or the other. See id.

B. Application of Section 502(b)(7)

Jordan argues that section 502(b)(7) does not apply to his claim because he was an independent contractor and not an employee of MCI. MCI argues that section 502(b)(7) does apply to the Claim because the Agreement was an Employment Contract and Jordan was an “employee” within the meaning of that statute.

Section 502(b)(7) provides

(b) [T]he court, after notice and a hearing, shall determine the amount of ... [a] claim ... as of the date of the Sling of the petition, and shall allow such claim in such amount, except to the extent that....

(7) if such claim is the claim of an employee for damages resulting from the termination of an employment contract, such claim exceeds -

(A) the compensation provided by such contract, without acceleration, for one year following the earlier of—

(i) the date of the Sling of the petition; or

(ii) the date on which the employer directed the employee to terminate, or such employee terminated, performance under such contract; plus

(B) any unpaid compensation due under such contract, without acceleration, on the earlier of such dates;

11 U.S.C. § 502(b)(7).

This section caps an employee’s claim for damages resulting from the termination of an employment agreement when the employer has Sled for bankruptcy to (1) one year’s compensation provided by such agreement measured from the earlier of the date of the Sling of the bankruptcy petition or the date of termination, plus (2) any unpaid compensation due on such date. See, e.g., In re Protarga, Inc., 329 B.R. 451, 465 (Bankr.D.Del.2005). The statutory language shows Congress’s intent to limit the amount of damages that are recoverable from a debtor employer when each of two conditions is present — -the claim must be that of an “employee” and the damages sought are for the termination of an “employment contract.” See In re Lavelle Aircraft Co., No. 94-17496DWS, 1996 WL 226852, at *3 (Bankr.E.D.Pa. May 2, 1996). Neither “employee” nor “employment contract” is deSned in the statute or legislative history. See id., at *4.

When originally enacted, subsection (b)(7) did not contain the phrase “of an employee.” That language was added in 1984.2 See In re Continental Airlines, 257 *682B.R. 658, 665 (Bankr.D.Del.2000). One commentator has stated that the 1984 addition was made to eliminate the possibility of third parties, such as third party contractors, asserting a claim against the estate. See id. (citing Norton Bankruptcy Code Pamphlet, 1994-95 Edition (Revised) § 502(b), Editor’s Comment at 379 (1995)).

The cases that have discussed the issues of whether a person was an “employee” and whether the parties had an “employment contract” pursuant to section 502(b)(7) have considered a varied, non-exhaustive list of factors. The factors evidencing an employment contract include (a) how the agreement is entitled, (b) if the agreement identifies job responsibilities, (c) if the agreement provides the terms for compensation and benefits, (d) if withholding taxes and social security benefits are deducted from pay, (e) if the agreement constrains the “employee” from certain other activities, (f) if the agreement is not assignable, (g) if the debtor had the right to control the activities of the “employee,” 3 and (h) the amount of hours the “employee” needed to devote to the debt- or’s business per year.4 Another case stated that factors showing that a person was not an employee included that (i) the “employee” ran his own business, and (j) the “employee” provided services from a location far from the debtor.5

The majority of these factors favor Jordan. First, the Agreement6 explicitly stated that “Jordan shall be treated as an independent contractor under the terms of this Agreement” and that the Debtors would not withhold taxes. On the federal tax Form 1099 that MCI provided to Jordan, MCI identified Jordan’s compensation as “non-employee compensation.” See Jordan’s Statement of Uncontested Material Facts In Support of Mot. Summ. J., Ex. 11. The Agreement did not provide that the Debtors would furnish Jordan with health insurance or pension benefits, and MCI has not shown that it did provide Jordan with those benefits. The Agreement did not provide the Debtors with substantial rights to control Jordan’s activities; in fact, under the Agreement, Jordan retained substantial rights over his activities for the Debtors. For example, MCI agreed to submit copies of “all packaging, advertising and/or promotional materials” to Jordan for his approval before releasing them to the general public. The Agreement also provided that the timing of Jordan’s work for MCI would be subject to Jordan’s schedule. The hours worked under the Agreement strongly favor Jordan. In Bergh, the court noted that the agreement limited the party’s consulting services to a maximum of 120 hours per year. Bergh, 141 B.R. at 416 (finding that the limit on the hours was one of the agreement’s “significant differences” from factors “which evidence an employment contract”). Here, Jordan was required to work a maximum of sixteen hours per year.

MCI points out that in In re Wilson Foods Corp., 182 B.R. 278 (Bankr.D.Kan.1995), the court found the consultant, a party designated as an “independent eon-*683tractor,” to be an employee under section 502(b)(7). The claimant there had been a party to a three-year “Employment Agreement” with the debtor, with the possibility of renewal for a like term. When her term was not renewed, the Employment Agreement provided that the claimant was to serve as a consultant for seven years. After the debtor filed for bankruptcy, the court found that the “terms contained in the written contract, delineated an ‘Employment Agreement,’ evidenced an employment relationship between” the debtor and the claimant. Wilson Foods, 182 B.R. at 283. Some of the factors in that case admittedly do not favor Jordan — there the claimant had to pay her own taxes, the Employment Agreement was assignable only under limited circumstances,7 and had a non-compete clause. The Agreement contains similar provisions. However, the Wilson Foods court considered that because the consulting contract was contained in the same Employment Agreement under which the claimant served as executive vice president, the “situation is not so far removed from the general statement that the purpose of § 502(b)(7) was to ‘limit the claims of key executive-employees, who for one reason or another, were able to exact long-term contracts calling for substantial remuneration.’ ” Wilson Foods, 182 B.R. at 288 (citation omitted). See also Russell Cave, 253 B.R. at 823 (“the critical difference ... [in] Wilson Foods ... is that her consulting contract was part and parcel of the employment contract”).

As shown by Russell Cave’s distinction of Wilson Foods, the policy considerations behind section 502(b)(7) favor Jordan. Section “502(b)(7) serves a ... purpose by limiting employee damage claims, especially those of officers, owner-managers and other key-executives who had been able to exact favorable long term contracts calling for substantial remuneration.” Lavelle Aircraft, 1996 WL 226852, at *5 (emphasis added); see also In re Prospect Hill Res., Inc., 837 F.2d 453, 455 (11th Cir.1988) (“One purpose of section 502(b)(7) was to relieve bankrupt employers of the continuing duty to pay high salaries to officers and owners-managers who had been able to exact favorable terms of tenure and salaries while the business prospered.”). Here, Jordan was not an officer, an owner-manager, or a key executive of MCI. He was a popular athlete whose image MCI wished to license to sell its services and products. Section 502(b)(7)’s envisioned harm of high-level corporate insiders negotiating a long-term deal has no application to Jordan, whose main duty to the company was showing up for sixteen hours a year at photo and commercial shoots that were presumably far from MCI’s corporate offices. See, e.g., In re Cincinnati Cordage & Paper Co., 271 B.R. 264, 269 (Bkrtcy.S.D.Ohio 2005) (“This code section was designed to limit the claims of key executives who had been able to negotiate contracts with very beneficial terms.”).

As pointed out in In re U.S. Truck Co., Inc., 89 B.R. 618, 627 (E.D.Mich.1988), the Report of the Commission on the Bankruptcy Laws of the United States, which originally proposed this exception and whose draft was adopted almost word-for-word, explained the rationale for this section: “This clause is intended principally to apply to long-term contracts providing substantial compensation to management *684executives of corporate debtors. It also applies to the termination of contracts obligating payment for future athletic, entertainment, or other services.” Commission Report, H.R. Doc. 137, 93rd Cong., 1st Sess., Part II at 106 (1973), reprinted in Collier on Bankruptcy, Appendix B, Part 4-674 (15th Ed. Rev.2006).

Based upon a review of aforementioned, most specifically the factors cited in the case law, the Court finds that Jordan was not an “employee” and the Agreement was not an “employment contract” pursuant to section 502(b)(7). Therefore, there being no genuine issue of material facts as to Jordan’s status, the Court grants summary judgment to Jordan on this point and holds that this basis for MCI’s objection to the Claim is overruled and denied.

C. Mitigation

The doctrine of avoidable consequences, which has also been referred to as the duty to mitigate damages, “bars recovery for losses suffered by a non-breaching party that could have been avoided by reasonable effort and without risk of substantial loss or injury.” Edward M. Crough, Inc. v. Dep’t of Gen. Servs. of D.C., 572 A.2d 457, 466 (D.C.1990). The burden of proving that the damages could have been avoided or mitigated rests with the party that committed the breach. See Obelisk Corp. v. Riggs Nat’l Bank of Washington, D.C., 668 A.2d 847, 856 (D.C.1995); see also Norris v. Green, 656 A.2d 282, 287 (D.C.1995) (“The failure to mitigate damages is an affirmative defense and the [breaching party] has the burden of showing the absence of reasonable efforts to mitigate”). The efforts to avoid or mitigate the damages do not have to be successful, as long as they are reasonable. See Edward M. Crough, 572 A.2d at 467.

Jordan argues that as a “lost volume seller” he was under no obligation to mitigate damages. Alternatively, Jordan argues that MCI failed to establish that Jordan could have entered a “substantially similar” endorsement contract and that Jordan acted reasonably in not entering another endorsement agreement after MCI’s breach. MCI counters that Jordan is not a lost volume seller and that MCI has shown that Jordan failed to take reasonable steps to mitigate damages.

The damages for a contract’s rejection are determined in accordance with the law that would govern the value of the claim outside the context of bankruptcy. See, e.g., R & O Elevator Co. v. Harmon, 93 B.R. 667, 669, 672 (D.Minn.1988) (discussing mitigation theory under applicable state law); see also In re Dabrowski, 257 B.R. 394, 414 n. 40 (Bankr.S.D.N.Y.2001) (state law determines consequences of breach deemed rejection under § 365); In re Mitchell, 249 B.R. 55, 58 (Bankr.S.D.N.Y.2000) (to determine the effect of rejection under § 365, “we look to state law”).

The Court will look to the District of Columbia (“D.C.”) as the applicable state law for mitigation and other consequences of MCI’s rejection of the Agreement. The parties, under Section 16 of the Agreement, “Arbitration; Governing Law,” provided that any controversy would be submitted to arbitration to be governed in accordance with D.C. law. This is the only choice of law provision in the Agreement. MCI has asserted that the Agreement was negotiated between “WorldCom in Mississippi and Michael Jordan’s agent in Washington, D.C. with input from Michael Jordan, a resident of Illinois.” New York’s choice-of-law rules would require application of D.C. law under a “center of gravity approach” as D.C. was where one party negotiated from and *685was the location specified in the only-choice of law provision. See Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.Y., 448 F.3d 573, 583 (2d Cir.2006) (stating factors, including place of negotiation, considered under “center of gravity” analysis); see also Cargill, Inc. v. Charles Kowsky Res., Inc., 949 F.2d 51, 55 (2d Cir.1991) (“New York courts generally defer to the choice of law made by the parties to a contract”).

The Court was not furnished nor did research reveal D.C. cases precisely on point. Therefore, the Court will discuss and rely on cases from other jurisdictions where needed.

1. Whether Jordan Was a “Lost Volume Seller ”

Jordan argues that MCI’s mitigation defense does not apply here because Jordan is akin to a “lost volume seller.” Jordan points to testimony demonstrating that he could have entered into additional endorsement contracts even if MCI had not rejected the Agreement. Thus, he argues, any additional endorsement contracts would not have been substitutes for the Agreement and would not have mitigated the damages for which MCI is liable.

“A lost volume seller is one who has the capacity to perform the contract that was breached in addition to other potential contracts due to unlimited resources or production capacity.” Precision Pine & Timber, Inc. v. United States, 72 Fed.Cl. 460, 490 (Fed.Cl.2006). A lost volume seller does not minimize its damages by entering into another contract because it would have had the benefit of both contracts even if the first were not breached. See Jetz Service Co. v. Salina Props., 19 Kan.App.2d 144, 865 P.2d 1051, 1055-56 (1993). The lost volume seller has two expectations, the profit from the breached contract and the profit from one or more other contracts that it could have performed at the same time as the breached contract. See Snyder v. Herbert Greenbaum & Assocs., 38 Md.App. 144, 380 A.2d 618, 624 (1977). “The philosophical heart of the lost volume theory is that the seller would have generated a second sale irrespective of the buyer’s breach” and that “[i]t follows that the lost volume seller cannot possibly mitigate damages.” D. Matthews, Should the Doctrine of Lost Volume Seller Be Retained? A Response to Professor Breen, 51 U. Miami L.Rev. 1195, 1214 (July 1997); see also Snyder, 380 A.2d at 625 (under this theory, “the original sale and the second sale are independent events”).

The lost volume seller theory is recognized in the Restatement (2d) of Contracts, §§ 347, 350 (1981) (the “Restatement (2d)”).8 The lost volume seller theo*686ry applies to contracts for services as well as goods. See Restatement (2d), § 347, ill. 16; see also Jetz Service, 865 P.2d at 1055-56 (applying theory to seller of services); Gianetti v. Norwalk Hosp., 64 Conn.App. 218, 779 A.2d 847, 853 (2001) (applying theory to provider of medical services), aff'd in part, rev’d in part, 266 Conn. 544, 833 A.2d 891 (2003).9

This case offers a twist on the typical lost volume seller situation. In what the Court regards as the typical situation, the non-breaching seller has a near-inexhaustible supply of inventory. See, e.g., Katz Commc’ns, Inc. v. Evening News Ass’n, 705 F.2d 20, 26 (2d Cir.1983). In the typical situation, when a buyer breaches an agreement to buy a good or service from the seller, the item is returned to inventory and the lost volume seller continues in its efforts to sell its goods or services. However, the transactions that occur following the breach are not necessarily the result of the breach but fundamentally the result of the seller continuing efforts to market its goods and services. It is this continuous effort coupled with a virtually limitless supply that warrants the lost volume exception to mitigation. As stated above, the transactions that may occur after the breach would in the context of the lost volume seller have occurred independent of the breach. Here, Jordan lacked a nearly limitless supply and had no intention of continuing to market his services as a product endorser.10

Although not addressed by a D.C. court, the majority of cases hold that Jordan bears the burden of proving that he is a lost volume seller. See generally Precision Pine, 72 Fed.Cl. at 495 (“The case law demonstrates that ... plaintiff bears the burden of demonstrating that it should be compensated as a lost volume seller”); Snyder, 380 A.2d at 624; Ullman-Briggs, Inc. v. Salton, Inc., 754 F.Supp. 1003, 1008-09 (S.D.N.Y.1991); R.E. Davis Chemical Corp. v. Diasonics, Inc., 826 F.2d 678, 684 (7th Cir.1987); Green Tree Fin. Corp. v. ALLTEL Info. Servs., Inc., No. Civ. 02-627 JRTFLN, 2002 WL 31163072, at *9 (D.Minn. Sept. 26, 2002).

To claim lost volume seller status, Jordan must establish that he would have had the benefit of both the original and subsequent contracts if MCI had not rejected the Agreement. See Ullman-Briggs, 754 F.Supp. at 1008. Although there is no definitive set of elements that the non-breaching party must show, many cases seem to follow the language from the Restatement (2d), Section 347, that the non-breaching party must show that it “could and would have entered into” a subsequent agreement. See, e.g., Donald Rubin, Inc. v. Schwartz, 191 A.D.2d 171, 172, 594 N.Y.S.2d 193, 194-95 (1st Dep’t 1993); Precision Pine, 72 Fed.Cl. at 496-97; Gianetti, 833 A.2d at 897; Jetz Ser*687vice, 865 P.2d at 1056; see also Green Tree Financial, 2002 WL 31163072, at *9 (“[t]o recover lost profits under this theory, a non-breaching party must prove three things: (1) that the seller of services had the capability to perform both contracts simultaneously; (2) that the second contract would have been profitable; and (3) that the seller of service would have entered into the second contract if the first contract had not been terminated”).

In his arguments, Jordan focuses primarily on his capacity to enter subsequent agreements, arguing that the loss of MCI’s sixteen-hour annual time commitment hardly affected his ability to perform additional endorsement services. On this prong alone, Jordan likely would be considered a lost volume seller of endorsement services because he had sufficient time to do multiple endorsements. Although he does not have the “infinite capacity” that some cases discuss, a services provider does not need unlimited capacity but must have the requisite capacity and intent to perform under multiple contracts at the same time. See Gianetti, 266 Conn. at 561-62, 833 A.2d 891 (plastic surgeon could be considered a lost volume seller if it were determined that he had the capacity and intent to simultaneously work out of three or four hospitals profitably).

Contrary to Jordan’s analysis, courts do not focus solely on the seller’s capacity. The seller claiming lost volume status must also demonstrate that it would have entered into subsequent transactions. See Diasonics, 826 F.2d at 684; Green Tree Financial, 2002 WL 31163072, at *9; Gianetti, 779 A.2d at 853 (“for sellers of personal services to come within the purview of the Restatement’s lost volume seller theory ..., they must establish,” in addition to capacity, that additional sales would have been profitable and that they would made the additional sale regardless of the buyer’s breach). Jordan has not shown he could and would have entered into a subsequent agreement. Rather, the evidence shows that Jordan did not have the “subjective intent” to take on additional endorsements. See Ullman-Briggs, 754 F.Supp. at 1008. The testimony from Jordan’s representatives establishes that although Jordan’s popularity enabled him to obtain additional product endorsements in 2003, Jordan desired to scale back his level of endorsements. Jordan’s financial and business advisor, Curtis Polk (“Polk”), testified that at the time the Agreement was rejected, Jordan’s desire was “not to expand his spokesperson or pitchman efforts with new relationships.” See Debtors’ Mot. Summ. J., App. 5, at 32. Polk testified that had Jordan wanted to do additional endorsements after the 2003 rejection, he could have obtained additional deals. See id. at 64-65. Jordan’s agent, David Falk (“Falk”), testified that “there might have been twenty more companies that in theory might have wanted to sign him” but that Jordan and his representatives wanted to avoid diluting his image. See Debtors’ Mot. Summ J., App. 6, at 24. Jordan’s Memorandum for Summary Judgment stated that at the time the Agreement was rejected, Jordan had implemented a strategy of not accepting new endorsements because of a belief that new deals would jeopardize his ability to achieve his primary goal of National Basketball Association (“NBA”) franchise ownership.

In a district court case in the Southern District of New York, the court held that the test of whether a plaintiff has established lost volume seller status has both subjective and objective components. See Ullman-Briggs, 754 F.Supp. at 1008-09. That case involved the breach of a sales distribution agreement; the plaintiff was a sales representation company that had *688represented the defendant, a manufacturer of small electrical appliances. Id. at 1004. After the defendant terminated the contract, the plaintiff took on seventeen new lines of products to represent. Id. at 1006. The plaintiff argued that its damages award should not be offset by the commissions it earned from these new lines. Id. at 1008. The court disagreed, finding that the plaintiff failed to show it had the subjective intent to take on these accounts even if the defendant had not terminated their agreement. Id. at 1009 (plaintiffs “own proof refuted that intent as to many of the additional lines”). The court stated that the plaintiffs “admission that it would not have had the subjective intent to take on many of the additional lines if Saltón had not terminated the contract” was “fatal to Ullman-Briggs’ claim that it may be properly be regarded as a lost volume seller.” Id. Here, although the situation is not strictly parallel because there were no subsequent deals by Jordan, the testimony by Jordan’s agent and advisor shows he lacked the subjective intent to take on additional endorsement opportunities regardless of MCI’s rejection of the Agreement.

Jordan’s situation is akin to that of the plaintiff in Samaritan Inns, Inc. v. District of Columbia, 114 F.3d 1227 (D.C.Cir.1997). In that case, Samaritan Inns, the plaintiff, provided below-market rental housing to recovering substance abusers. Id. at 1229. It successfully sued the District of Columbia and District officials for violations of the Fair Housing Act, such as unlawfully enforcing a stop-work order and initiating proceedings to revoke the plaintiffs construction permits. At issue on appeal, and of relevance here, was a portion of the damages award. The defendants appealed the award of more than $2 million in damages for potential contributions the plaintiff claimed it lost because of the defendants’ conduct. Id. at 1229, 1232. Once the controversy began, Samaritan Inns had chosen not to begin a planned fundraising campaign and argued that its damages included the lost contributions from this campaign. Id. The court analogized the plaintiffs argument to the lost volume seller theory, as the plaintiff claimed that charitable contributions are given on a regular basis. Id. at 1236. “[I]f a charity solicits money on an annual basis, a donation in one year will not compensate the charity for a donation ‘lost’ in a prior year.” Id. If not for the disruption of an annual fundraising drive, “the charity would have received contributions in both years.” Id. The problem with the damages award, according to the district court, was that the fundraising campaign was of “limited duration” and not an annual program. Id. The district court noted that if the fundraising program had been an annual event, a fact-finder could reasonably conclude that the plaintiff irretrievably lost the contributions, but it was unexplained under the circumstances — circumstances that included the “limited” duration of the campaign — why the plaintiff could not “simply make up the ‘lost’ contributions in later years and still achieve the goals of the [fundraising] campaign.” Id. Here, if Jordan had been seeking additional endorsement agreements independent of the Agreement’s rejection, the Court could conclude that Jordan was a lost volume seller and irretrievably lost the money from the MCI Agreement. However, given Jordan’s planned limitation on his endorsement activity based upon a desire to cultivate an image he perceived more compatible with that of an owner of an NBA team, rather than to continue to market his celebrity athlete image, the Court cannot make that conclusion.

One of the classic examples of the lost volume seller is found in Neri v. Retail Marine Corp., 30 N.Y.2d 393, 399-400, 334 *689N.Y.S.2d 165, 169-70, 285 N.E.2d 311 (N.Y.1972)

[I]f a private party agrees to sell his automobile to a buyer for $2,000, a breach by the buyer would cause the seller no loss (except incidental damages, i.e., expense of a new sale) if the seller was able to sell the automobile to another buyer for $2,000. But the situation is different with dealers having an unlimited supply or standard-priced goods. Thus, if an automobile dealer agrees to sell a car to a buyer at the standard price of $2,000, a breach by the buyer injures the dealer, even though he is able to sell the automobile to another for $2,000. If the dealer has an inexhaustible supply of cars, the resale to replace the breaching buyer costs the dealer a sale, because, had the breaching buyer performed, the dealer would have made two sales instead of one. The buyer’s breach, in such a case, depletes the dealer’s sales to the extent of one, and the measure of damages should be the dealer’s profit on one sale.

This example would surely have a different result if the car dealership was winding down its business and had agreed to sell one of its last cars to a buyer. If that buyer subsequently breached the contract and did not purchase the car, the dealership could hardly be expected to recover lost profits damages if the dealer put the car back onto a deserted ear lot, made no attempts to sell it, and kept the dealership shuttered to new customers. Those modifications are analogous to Jordan’s situation, with his stated desire to withdraw his services from the endorsement marketplace, and the lost volume seller theory accordingly does not apply to his circumstances.

Jordan states that it is a “red herring” to speculate under the lost volume analysis on what he would have done because that

ignores the central point of the lost volume principle: if Jordan had ... accepted a substantially similar endorsement opportunity- — exactly what [MCI] argues he was required to do to mitigate damages — the damages for which [MCI] is liable would not have been reduced by one penny because the lost volume principle would allow Jordan to retain the benefits of both the [MCI] Agreement and the hypothetical additional endorsement.

See Michael Jordan’s Reply Brief, at 14-15.

Jordan overlooks an important point about the lost volume seller theory — that the “original sale and the second sale are independent events,” Snyder, 380 A.2d at 625, because the lost volume seller’s intent to enter into new contracts is the same before and after a purchaser’s breach. The lost volume seller’s desire to sell more units of goods or services is virtually unaffected by the loss of a single sale or agreement.

Next, even if Jordan had mitigated damages by entering one subsequent endorsement agreement, this, without more, does not mean that Jordan was a lost volume seller. The lost volume seller has the intent and capacity to sell multiple units despite the breach of a contract for one transaction.

Finally, if Jordan had entered into a subsequent agreement or agreements, and if he had showed both the capacity and the intent to make subsequent sales, that might have had the effect of helping him to establish his status as a lost volume seller, which generally would relieve him of the duty to mitigate. This would not be a novel situation but it ignores the fact that he did not do so. See, e.g., Storage Tech. Corp. v. Trust Co. of N.J., 842 F.2d 54, 57 (3d Cir.1988) (“The lost volume seller theory is a response to a breaching buyer’s *690right to have a non-breaching seller mitigate damages. In other words, a seller can avoid the effect of its failure to mitigate by proving that it was a lost volume seller.”); Chicago Title Ins. Corp. v. Magnuson, No. 2:03-CV-368, 2005 WL 2373430, at *23 (S.D.Ohio Sept. 26, 2005) (when there is no evidence in the record that plaintiff “turned away or would have turned away business during the relevant period” and the “only evidence on the issue supports that the [plaintiff] could and would have completed such transactions,” the consequent instructions to the jury that the plaintiff was a lost volume seller and therefore had no duty to mitigate its damages were not erroneous).

Because the evidence establishes, among other things, that Jordan would not have entered into subsequent agreements, Jordan has not established that he is a lost volume seller. This theory thus does not relieve Jordan from the duty to mitigate damages.

2. Whether Jordan Made Reasonable Efforts to Mitigate

Jordan argues at length that MCI must show that Jordan could have entered a “substantially similar” endorsement contract in order to mitigate damages. However, this is not the law of the mitigation of damages or the avoidable consequences theory. This language stems from federal employment cases concerning back pay and mitigation, which this case, while similar in many respects, is not. See, e.g., Ford Motor Co. v. E.E.O.C., 458 U.S. 219, 231-32, 102 S.Ct. 3057, 3065-66, 73 L.Ed.2d 721 (1982) (the duty to mitigate damages, “rooted in an ancient principle of law, requires the claimant to use reasonable diligence in finding other suitable employment. Although the ... claimant need not go into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to back pay if he refuses a job substantially equivalent to the one he was denied”) (footnotes omitted); Ingrassia v. Shell Oil Co., 394 F.Supp. 875, 886 (S.D.N.Y.1975) (“The general rule in wrongful discharge actions is that the employee is obliged to mitigate damages by seeking and accepting other available employment of the same or substantially similar character but not employment of a substantially different kind”).

Several of the justifications for the “substantially similar or equivalent” standard of employment law, aside from the general remedial policy of making the non-breaching party whole for losses caused by the breaching party, show why there is less concern here regarding a “substantially equivalent” opportunity as Jordan was not an employee of MCI. For one, the standard exists in part to ensure the employee’s future advancement by mandating that the employee’s promotional opportunities and status should be virtually identical to the prior position. See Sellers v. Delgado Community College, 839 F.2d 1132, 1138 (5th Cir.1988). Since Jordan was never an employee of MCI, this is not relevant. Second, to require acceptance of inferior employment can mean “that one who has been discriminated against would be obliged, in order to mitigate damages, to submit to the very discrimination of which he complains.” See Williams v. Albemarle City Bd. of Ed., 508 F.2d 1242, 1244 (4th Cir.1974). This, obviously, has no application here. Finally, the employee’s duty to make reasonable efforts in finding substantially equivalent employment is “based both on the doctrine of mitigation of damages and on the policy of promoting production and employment.” See N.L.R.B. v. Miami Coca-Cola Bottling Co., 360 F.2d 569, 575 (5th Cir.1966).

*691The main case relied on by Jordan for this argument regarding a “substantially similar” opportunity is a case analyzed under employment law and one that presented a completely different factual and procedural background. See Parker v. Twentieth Century-Fox Film Corp., 3 Cal.3d 176, 89 Cal.Rptr. 737, 474 P.2d 689 (1970). In Parker, the plaintiff, a leading movie actress, agreed to perform in a musical-type film in California. Id. at 690. The employer studio later decided not to make the movie and offered to the plaintiff as a substitute the leading role in a dramatic “western type” movie set in an opal mine and to be filmed in Australia. Id. at 694. The plaintiff turned down that offer, sued for damages on the original agreement, and the trial court ruled on a summary judgment motion that the earnings from this substitute employment that the plaintiff refused could not be applied in mitigation because the second offer was “different” and “inferior.” Id. The California Supreme Court affirmed. Id.11

More accurately, MCI must show the absence of reasonable efforts by Jordan to avoid consequences or minimize his damages. See Norris v. Green, 656 A.2d 282, 287 (D.C.1995); Joseph M. Perillo, Calamari & Perillo on Contracts, § 14.15, at 584 (5th Ed.2003) (“The doctrine of avoidable consequences merely requires reasonable efforts to mitigate damages”). As the D.C. law has not addressed this issue in any depth, the Court again turns to other jurisdictions where necessary.

Since “reasonable efforts in the form of affirmative steps are required to mitigate damages,” see Robinson v. United States, 305 F.3d 1330, 1334 (Fed.Cir.2002) (emphasis added) (citing Restatement (2d) § 350), MCI carries its burden by showing that Jordan has not taken affirmative *692steps to mitigate damages. Jordan admits in his brief that at the time of the rejection of the Agreement, “Jordan had already implemented a business strategy of not accepting new endorsements.” See Jordan’s Memo, in Support of Mot. Summ. J. at 17. Falk testified that a replacement telecommunications company was not approached. See Debtors’ Mot. Summ. J., App. 6, at 25-26. Polk testified that Jordan did not return to the endorsement marketplace to try and replace the revenue he was to be paid under the Agreement. See Debtors’ Mot. Summ. J., App. 5, at 28-29, 55. Polk explained that Jordan did not wish to expand his “pitchman efforts with new relationships” because of his primary goal of becoming the owner of an NBA team. Id. at 31-32. Although Jordan points to his discussions with another company, Nextel, as showing that he was willing to listen to endorsement agreements after MCI’s bankruptcy, MCI effectively responds that responding to an inquiry by giving them contact information and indicating a willingness to respond to another call “is not trying to find an alternative” agreement — it is, in effect, “doing nothing.” See Transcript of Sept. 12, 2006 Hearing, at 32-33. Based on the foregoing, and drawing all permissible factual inferences in favor of Jordan, the Court determines that MCI has established that Jordan did not take affirmative steps to mitigate damages.

3. Whether Jordan’s Beliefs that Another Endorsement Would Dilute His Impact as an Endorser or Harm His Reputation Were Reasonable Justifications for not Mitigating Damages

Jordan cites the risk that entering another endorsement contract could dilute his impact as an endorser or damage his reputation or business interests.

a. Dilution

Jordan’s dilution argument is not convincing. Jordan’s agent Falk testified that although there were no “fixed numbers” for the amount of endorsements, Jordan and his representatives were wary about dilution and sensitive about “protecting the brand” of Jordan. See Debtors’ Mot. Summ. J., App. 6, at 11. Jordan does not set forth any facts showing that Jordan’s image was at risk of dilution. MCI convincingly responds that adding an agreement to replace a lost one is merely maintaining the status quo, not a dilution of Jordan’s impact by addition. MCI’s expert stated that Jordan had previously had sixteen endorsement agreements in place (see Debtors’ Memo, in Opp. to Jordan’s Mot. for Summ. J., Ex. A (Carter Depo. at 50, 91)), which further weakens Jordan’s dilution argument and casts doubt on Falk’s statement that Jordan and his advisors “always felt that less is more” in terms of endorsements. See Michael Jordan’s Memo. In Support of Mot. for Summ. J. at 16-17. While the Court recognizes that Jordan’s image is the true commodity here and its market value could be diluted from overexposure, MCI has shown that Jordan’s image was not at risk of dilution by replacing the MCI endorsement agreement with another one. The only statements Jordan offers to support his argument that he behaved reasonably by not seeking another endorsement in 2003 because of a concern with diluting his image are conclusory in nature and contradicted by the available evidence. The contention that pursuing an endorsement opportunity would dilute the image Jordan wished to cultivate as one befitting an NBA team owner, also discussed under Point 4 below, may well raise factual issues regarding the impact an endorsement may have on a team owner’s image but that impact is irrelevant to Jordan’s duty to *693mitigate damages for his “rejected” endorsement contract. There is no genuine issue of material fact that dilution did not excuse Jordan’s duty to mitigate damages.

b. Risk to Reputation

Under the risk to reputation theory Jordan cites, an injured party is not allowed to recover from a wrongdoer those damages that the injured party “could have avoided without undue risk, burden or humiliation.” See Restatement (2d), § 350(1). Jordan’s “harm to reputation” argument is flawed because the envisioned harm to Jordan’s reputation does not rise to the level of harm found in the cited case law.

The cases cited by Jordan illustrate the harm to reputation that will excuse a party’s duty to mitigate. In Eastman Kodak Co. v. Westway Motor Freight, Inc., 949 F.2d 317 (10th Cir.1991), Kodak shipped a load of sensitized photographic material on a truck operated by the defendant. Most of the material was destroyed in transit because of the defendant’s mishandling. The Tenth Circuit held that Kodak was not required to sell the damaged merchandise to mitigate damages, stating that the record revealed that Kodak’s reputation, which it spent considerable resources in developing, “could be harmed if it was required to sell damaged merchandise in order to mitigate damages.” Id. at 320.

Another case cited by Jordan is similar to Eastman Kodak. In Sony Magnetic Products, Inc. of America v. Merivienti O/Y, 668 F.Supp. 1505 (S.D.Ala.1987), the plaintiffs merchandise, cassette tapes, had been damaged while it was being loaded onto a ship. The plaintiff refused to allow the cassettes to be marketed as “seconds” with only a non-warranty sticker on them and without removal of the marks identifying the cassettes as plaintiffs products. The court stated it was “convinced that as a matter of public policy a manufacturer which has spent years and millions of dollars developing a reputation in the marketplace should not be required to jeopardize that reputation under [those] circumstances.” Id. at 1515.

Those cases show the uncontroversial maxim that a plaintiff faced with the choice of (1) selling a sub-standard product to the public to mitigate damages caused by the breach of another and (2) doing nothing&emdash;can choose to do nothing, but Jordan was not confronted with those circumstances. While Jordan’s reputation is considerable and obviously the result of careful development, there are no factual assertions that support the proposition that Jordan’s choosing another endorsement opportunity is akin to being forced to sell damaged goods, as was the case in Eastman Kodak and Sony Magnetic Products.

Jordan also cites District Concrete Co. v. Bernstein Concrete Corp., 418 A.2d 1030, 1037 (D.C.1980), for the proposition that it is not unreasonable for a plaintiff “to take into consideration ... consequences such as injury to reputation” as a factor in post-breach decisions. Bernstein had sued its concrete supplier, District Concrete, for breach of a requirements contract. Bernstein was the sub-contractor for a construction project building an apartment complex. Id. at 1032. After the complex’s roof was poured with concrete, defects in the concrete were found. Id. at 1033. Bernstein considered two approaches to cure the problem (1) tearing out the slab and replacing it, or (2) building a “composite slab” over the defective area. Id. Bernstein estimated the cost of each approach to be about $100,000 but considered that the highly visible “tear-out method” could damage Bernstein’s and the general contractor’s reputations. Id. Although the chosen “composite slab” approach ended *694up costing more than anticipated, the court held that the choice of this method was reasonable when made, given that the “costs and time involved” for each were comparable and also considering the consequences of possible reputation damage. Id. at 1037.

That case is of little help to Jordan. For one, any harm to Jordan’s reputation arising from MCI’s bankruptcy is not comparable to the reputation damage a construction contractor faces from building a defective roof. As MCI’s expert testified, consumers do not believe that celebrity endorsers are experts in the products they endorse,12 while a consumer would expect a builder to build a defective-free roof. If the roof fails, consumers would blame the builder. If a company fails, consumers do not blame the company’s celebrity endorsers. Also, Jordan has not shown that he faced two reasonable approaches to mitigate his damages, with one of those approaches carrying a risk to his reputation. Jordan has stated that he was faced with two choices (1) mitigate damages, which he alleges could harm his reputation, or (2) concentrate on a venture that has no connection to the mitigation of damages. This situation is thus not comparable to District Concrete.

The above analysis also applies to Jordan’s cited case of Citizens Fed. Bank v. United States, 66 Fed.Cl. 179 (Fed.Cl.2005). There, the court held that the breaching party cannot engage in “Monday-morning quarterbacking” to criticize the wronged party’s choice of mitigation. Id. at 185. “Where a choice has been required between two reasonable courses, the person whose wrong forced the choice can not complain that one rather than the other was chosen.” Id. Here, MCI is not complaining about the choice between “two reasonable courses” of mitigation. MCI is arguing that choosing to take no steps to mitigate is not a reasonable course.

In arguing that Jordan acted reasonably by avoiding further endorsements based on a belief that those efforts would harm his business interests or reputation, Jordan argues essentially that he would be harmed by doing precisely what he originally contracted to do under the Agreement and what he has been doing for other clients for a number of years — endorsing products and services. The Court recognizes the possibility of Jordan’s market saturation being a valid concern but Jordan’s argument that he wanted to get out of endorsements to pursue other ventures does not reheve the duty to mitigate. Furthermore, MCI’s expert stated that an additional endorsement agreement would not have harmed Jordan’s reputation by either diminishing Jordan’s image in the endorsement marketplace or harming Jordan’s goal of becoming an NBA team owner. See Debtors’ Reply Memo, Exh. C. at 91, 58 (pointing out that other NBA franchise owners have multiple business interests). Jordan has not asserted any facts to refute those assertions nor did he undermine the credibility of the expert making such assertions. Based on the foregoing, there is a no genuine issue of material fact as to whether reasonable endorsement efforts done to mitigate damages would have harmed Jordan’s reputation. The Court notes that even if there were a genuine issue of material fact as to whether another endorsement would negatively impact his becoming an NBA team owner, for the reasons set forth below, such would be irrelevant to the issue of mitigation regarding his endorsement contract.

*6954. Whether Focusing on NBA Ownership Was a Reasonable Decision

Jordan cites his goal of owning an NBA team as a reasonable justification for his decision not to enter additional endorsement agreements.

In support, Jordan cites cases that hold if a non-breaching plaintiff chooses a reasonable course of action despite the existence of another course of action that, in hindsight, would have been better at lessening harm, the plaintiffs damages are not reduced. A closer examination at such cases reveals that they are not applicable to Jordan’s situation. Cases that Jordan cites, such as Novelty Textile Mills, Inc. v. C.T. Eastern, Inc., 743 F.Supp. 212 (S.D.N.Y.1990), and Fed. Ins. Co. v. Sabine Towing & Transp. Co., 783 F.2d 347 (2d Cir.1986), share a common theme not present in the instant matter: the non-breaching party faced a choice between two reasonable courses of action right after the breach or tort that inflicted the damage, and made a choice to lessen the damage that appeared reasonable at the time. See, e.g., Novelty Textile Mills, 743 F.Supp. at 219 (“If the course of conduct chosen by the plaintiff was reasonable, the plaintiff can recover despite the existence of another reasonable course of action that would have further lessened the plaintiffs damages”). Jordan’s choice to focus on NBA team ownership, in contrast, was not done to lessen the damage from MCI’s rejection, but was done for other, unrelated business reasons.

In Novelty Textile Mills, the plaintiff hired the defendant to ship its fabric, but while the defendant had the fabric in its possession, a liquid contaminant damaged the goods. 743 F.Supp. at 215. The court held that, given the circumstances, the plaintiffs decision to salvage the damaged goods rather than attempting to clean them was reasonable. Id. at 219. The court considered factors such as the resale cost, the low value of the goods, and that the goods were no longer fit for their intended use. Id. at 220.

In Tennessee Valley v. M/V Delta, 598 F.2d 930 (5th Cir.1979), the plaintiffs barge sank after the defendant towed it. 598 F.2d at 932. The plaintiff decided to raise the barge from the river bottom, rather than abandoning it and contacting the U.S. Army Corps of Engineers, who would have removed it and sought recovery from the negligent party. Id. at 934. The trial court concluded that the sinking resulted entirely from the defendant’s lack of due care. Id. at 932. But at the time the plaintiff made the decision to raise the barge, the defendant denied liability, so the plaintiff faced the possibility that it could be liable for the costs of removal and for any damage the abandoned vessel caused to third parties if it did not act. Id. at 934. The court found the decision to remove the barge to be a reasonable one. Id. at 935. “In determining whether the victim’s conduct falls within the range of reasonableness, the court must consider that the necessity for decision-making was thrust upon him by the defendant, and judgments made at time of crisis are subject to human error.” Id. at 933.

Those cases demonstrate that a court will not sharply second-guess the decisions made by a non-breaching party when it attempts to mitigate the damages caused by the breaching party. The cases differ from Jordan’s situation because his decision to focus on NBA team ownership was independent of MCI’s rejection and was not contemplated as one that would lessen the harm of that rejection. Such a decision was unrelated to the duty to mitigate damages resulting from a rejected agreement as a product endorser. In short, the argument that Jordan acted reasonably by focusing solely on his efforts to *696become an NBA team owner is a red herring. It may have been reasonable for Jordan to focus on becoming an NBA team owner in the scope of Jordan’s overall future desires but that does not mean it can support a determination that he was relieved of his obligation to mitigate damages in response to MCI’s rejection of the Agreement.

Furthermore, Jordan did not have to pursue any endorsement, such as one that would be beneath a celebrity of Jordan’s stature, e.g., endorsing a product likely to be distasteful to Jordan or his fans. Jordan had the duty to take reasonable efforts to mitigate, such as by seeking another endorsement for an established, reputable company for compensation near to what he received from MCI. MCI has established that there is no genuine issue as to whether Jordan made reasonable efforts to do so. The Court finds that as a matter of law Jordan has failed to mitigate damages. See Hutton v. Sally Beauty Co. Inc., No. 4:02-CV-00190-SEB-WG, 2004 WL 2397606, at *4 (S.D.Ind. Oct. 22, 2004) (granting summary judgment to defendant where defendant introduced sufficient evidence to establish that plaintiff made no reasonable attempts to mitigate her damages following the termination of her employment).

D. The Need for a Further Determination of Damages

A case cited by MCI shows the correct path for further resolution of this matter. Wisconsin Ave. Nursing Home v. D.C. Human Rights Comm’n, 527 A.2d 282 (D.C.1987), did not, as MCI asserts,13 hold that the plaintiffs failure to mitigate damages barred any recovery. After finding that the discharged employee had not exercised reasonable diligence in seeking substitute employment, the court remanded the case for the factual determination, with the burden of proof on the defendant, of the wages the plaintiff could have earned had she diligently sought substitute employment. Id. at 291-92. See also Obelisk Corp. v. Riggs Nat’l Bank of Washington, D.C., 668 A.2d 847, 856 (D.C.1995) (affirming this jury instruction “if you find ... that a party should have taken advantage of a business opportunity which was reasonably available to a party under all of the circumstances shown by the evidence, then you should reduce the amount of that party’s damages by the amount that the party would have received if it had taken advantage of such opportunity. However, the burden of proving that the damage could have been avoided or mitigated rests with the party that committed the breach.”); In re Rowland, 292 B.R. 815, 820 (Bankr.E.D.Pa.2003) (“To prove a failure to mitigate, a defendant must show: (1) what reasonable actions the plaintiff ought to have taken, (2) that those actions would have reduced the damages, and (3) the amount by which the damages would have been reduced”) (quoting Koppers Co., Inc. v. Aetna Cas. & Surety Co., 98 F.3d 1440 (3rd Cir.1996)). Thus, even though the Court finds that Jordan has failed as a matter of law to mitigate damages, the Court does not disallow the Claim in full.

In this case, there has been no determination and no evidence presented of what Jordan could have reasonably earned had he fulfilled his obligation to mitigate damages by entering the endorsement marketplace following MCI’s rejection of the Agreement. It is not clear that Jordan could have found an endorsement agreement in 2003 that paid him $2 million a year for the contract years 2004 and 2005. It is also unlikely that Jordan would have *697been obligated to accept a large number of endorsements of smaller value to make up the $2 million, due to the dilution effect such a number would have, because such efforts would likely be unreasonable. However, the facts may reveal that one or more endorsements could have been found without “diluting” his image and partially or completely mitigating the damages. Although MCI’s expert stated that he believed that Jordan could have easily earned $2 million from an additional endorsement in 2003, (see Debtors’ Memo. In Opp. to Jordan Mot. for Summ. J., Ex. A (Carter Depo. at 92)), that opinion was not presented with any objective evidence of the marketplace, such as what other celebrity endorsers of Jordan’s stature earned that year and which companies were in the market for an endorser of Jordan’s stature. Although the Court finds that as a matter of law Jordan has not mitigated damages, there must be an evidentiary hearing on how much his claim should be reduced to reflect what portion would have been mitigated had he used reasonable efforts to do so.

Conclusion

Jordan’s motion for summary judgment is granted in part and denied in part. To the extent Jordan moved to overrule MCI’s objection to the Claim that the “Agreement” is an employment agreement under section 502(b)(7), Jordan’s motion is granted. To the extent Jordan moved to overrule MCI’s objection based on MCI’s argument that Jordan failed to mitigate damages, Jordan’s motion is denied. MCI’s motion for summary judgment is granted in part and denied in part. To the extent MCI sought to disallow the Claim in full, MCI’s motion is denied. To the extent MCI moved for a ruling that section 502(b)(7) limits the Claim, MCI’s motion is denied. To the extent MCI claimed that Jordan failed to mitigate damages, MCI’s motion is granted in part. The Court finds that Jordan failed to mitigate damages but a further evidentiary hearing is necessary to determine what Jordan could have received had he made reasonable efforts to mitigate, a determination that consequently will affect the Claim.

The Debtors are to settle an order consistent with this opinion.

JUSTICE TIMMER,

opinion of the Court:

¶ 1 A liquidated damages contract provision is enforceable if the pre-determined amount for damages seeks to compensate the non-breaching party rather than penalize the breaching party. We here hold that a nearly $1.4 million late fee assessed on a final loan balloon payment constitutes an unenforceable penalty.

I. Background

¶2 In 2006, Canadian Imperial Bank of Commerce loaned Dobson Bay Club II DD, LLC and related entities (“Dobson Bay”) $28.6 million for Dobson Bay’s purchase of four commercial properties. The loan was secured by a deed of trust encumbering those properties. Under the terms of a promissory note, Dobson Bay was to tender interest-only payments to Canadian Imperial Bank until the loan matured in September 2009, when the entire principal would become due—the “balloon” payment. In 2009, the parties extended the loan maturity date to September 2012.

¶3 Dobson Bay bore significant consequences for any delay in payment. In addition to continuing to pay regular interest, Dobson Bay was required to pay default interest and collection costs, including rea*110sonable attorney fees, and a 5% late fee assessed on the payment amount. If Canadian Imperial Bank foreclosed the deed of trust, Dobson Bay was also obligated to pay costs, trustee’s fees, and reasonable attorney fees.

¶ 4 As the 2012 loan maturity date approached, the parties negotiated to extend that date but could not reach an agreement. The maturity date passed, and Dobson Bay failed to make the balloon payment.

¶ 5 La Sonrisa de Siena, LLC (“La Sonri-sa”) bought the note and deed of trust from Canadian Imperial Bank and promptly noticed a trustee’s sale of the secured properties. It contended that Dobson Bay owed more than $30 million, including a nearly $1,4 million late fee. Dobson Bay disputed it owed various sums, including the late fee. Litigation ensued. Dobson Bay secured new financing and paid the outstanding principal and undisputed interest in March 2013. (Dobson Bay simultaneously deposited the disputed amounts with the superior court pending the litigation.) The parties filed cross-motions for partial summary judgment on whether the late fee provision in the note was an enforceable liquidated damages provision or, instead, an unenforceable penalty.

¶ 6 The superior court granted partial summary judgment for La Sonrisa, ruling that the late fee was enforceable as liquidated damages. The court of appeals reversed, holding “as a matter of law, that absent unusual circumstances the imposition of a flat 5% late-fee on a balloon payment for a conventional, fixed-interest rate loan is not enforceable as liquidated damages.” Dobson Bay Club II DD, LLC v. La Sonrisa de Siena, LLC, 239 Ariz. 132, 140 ¶ 22, 366 P.3d 1022, 1030 (App. 2016).

¶ 7 We granted review because the enforceability of late fee provisions in commercial loan agreements presents a legal issue of statewide importance. We have jurisdiction pursuant to article 6, section 6(3) of the Arizona Constitution and A.R.S. § 12-120.24.

II. Discussion

A. Enforceability of liquidated damages provisions

¶ 8 Parties to a contract can agree in advance to the amount of damages for any breach. See Miller Cattle Co. v. Mattice, 38 Ariz. 180, 190, 298 P. 640, 643 (1931). Such “liquidated damages” provisions serve valuable purposes. They provide certainty when actual damages would be difficult to calculate, and they alleviate the need for potentially expensive litigation. Cf. Mech. Air Eng’g Co. v. Totem Constr. Co., 166 Ariz. 191, 193, 801 P.2d 426, 428 (App. 1989) (noting that a liquidated damages provision “promotes enterprise by increasing certainty and by decreasing risk-exposure, proof problems, and litigation costs”); Restatement (Second) of Contracts (“Restatement Second”) § 366 cmt. a. (Am. Law Inst. 1981) (“The enforcement of such provisions ... saves the tune of courts, juries, parties and witnesses and reduces the expense of litigation.”).

¶ 9 Parties, however, do not have free rein in setting liquidated damages. Because “[t]he central objective behind the system of contract remedies is compensatory, not punitive,” parties cannot provide a penalty for a breach. Restatement Second § 356 cmt. a; see also id. (“Punishment of a promi-sor for having broken his promise has no justification on either economic or other grounds and a term providing such a penalty is unenforceable on grounds of public policy,”). “A [contract] term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.” Id. § 356(1). The contract remains valid, however, and the non-breaching party can still recover actual damages. See Gary Outdoor Advert. Co. v. Sun Lodge, Inc., 133 Ariz. 240, 243, 650 P.2d 1222, 1225 (1982); Miller Cattle, 38 Ariz. at 190, 298 P. at 643.

¶ 10 Arizona courts have used different methods to decide whether stipulated damages provisions are enforceable as liquidated damages or void as penalties. This Court has considered whether the stipulated amounts were reasonably related to actual damages. See Marshall v. Patzman, 81 Ariz. 367, 370, 306 P.2d 287, 289 (1957); Tennent v. Leary, 81 Ariz. 243, 249, 304 P.2d 384, 388 (1956); Weatherford v. Adams, 31 Ariz. 187, 197, 251 P. 453, 456 (1926); Armstrong v. Irwin, 26 *111Ariz. 1, 9, 221 P. 222, 225 (1923). We have also examined liquidated damages provisions prospectively, considering whether they were reasonable at the time the contracts were created. See Gary Outdoor Advert. Co., 133 Ariz. at 242-43, 650 P.2d at 1224-25; Miller Cattle, 38 Ariz. at 190, 298 P. at 643.

¶ 11 Our court of appeals has generally applied a two-part test developed under the Restatement (First) of Contracts (“Restatement First”) (Am. Law Inst. 1928) § 339. Under that test, which our dissenting colleague implicitly relies on, see infra ¶50, a stipulated damages provision is an unenforceable penalty unless “(1) the amount fixed is a reasonable forecast of just compensation for harm that is caused by the breach, and (2) the harm caused is ‘incapable or very difficult of accurate estimation.’” Dobson Bay Club, 239 Ariz. at 136 ¶ 9, 366 P.3d at 1026 (citing Restatement First § 339); see also Pima Sav. & Loan Ass’n v. Rampollo, 168 Ariz. 297, 300, 812 P.2d 1115, 1118 (App. 1991); Meek Air Eng’g Co., 166 Ariz. at 193, 801 P.2d at 428; Larson-Hegstrom & Assocs., Inc. v. Jeffries, 145 Ariz. 329, 333, 701 P.2d 587, 591 (App. 1985).

¶ 12 In this case, the court of appeals applied Restatement Second § 356(1), which reframed the Restatement First test in 1981 to harmonize with Uniform Commercial Code (“UCC”) § 2-718(1). See Dobson Bay Club, 239 Ariz. at 136 ¶ 9 n.2, 366 P.3d at 1026 n.2; Restatement Second § 356 reporter’s note. Section 356(1) provides that a liquidated damages provision is enforceable, “but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss.” This test requires courts to consider (1) the anticipated or actual loss caused by the breach, and (2) the difficulty of proof of loss. Whether a fixed amount is a penalty turns on the relative strengths of these factors. As explained by comment b to § 356:

If the difficulty of proof of loss is great, considerable latitude is allowed in the approximation of anticipated or actual harm. If, on the other hand, the difficulty of proof of loss is slight, less latitude is allowed in that approximation. If, to take an extreme case, it is clear that no loss at all has occurred, a provision fixing a substantial sum as damages is unenforceable.

¶ 13 La Sonrisa urges us to disavow the Restatement Second § 356(1) test to the extent it “retrospectively” considers actual damages. It contends that this approach undermines the contracting parties’ freedom to allocate risk and defeats the purpose of a liquidated damages provision by requiring the non-breaching party to establish actual damages. Not so.

¶ 14 Section 356(1) provides two methods for deciding whether the parties’ damages forecast was reasonable. The amount is reasonable if it approximates either the loss anticipated at the time of contract creation (despite any actual loss) or the loss that actually resulted (despite what the parties might have anticipated in other circumstances). See Restatement Second § 356 cmt. b. The non-breaching party is not required to prove actual damages to enforce a liquidated damages provision, and a court will respect the parties’ agreement if it is “reasonable” in relation to anticipated or actual loss. But if the difficulty of proof of loss is slight and either no loss occurs or the stipulated sum is grossly disproportionate to the loss, the parties’ stipulation would be unreasonable and therefore unenforceable as a penalty. See id. This approach is consistent with this Court’s opinions. See Marshall, 81 Ariz. at 370, 306 P.2d at 289 (holding that stipulated damages were “unconscionable under the circumstances” and unenforceable because the non-breaching party suffered no loss); Weatherford, 31 Ariz. at 197, 251 P. at 456 (“Where the amount retained is grossly disproportionate to the actual damages ... and, especially, when there is available a simple method for ascertaining the exact damages, [a stipulated damages provision] will be considered as a penalty.”).

¶ 15 We adopt the Restatement Second § 356(1) to test the enforceability of a stipulated damages provision. First, § 356(1) aligns with UCC § 2-718(1), which Arizona has adopted. See A.R.S. § 47-2718(A). Thus, courts can apply the same test to both UCC-govemed and non-UCC-governed contracts. Second, the test best accommodates the goal of compensating the non-breaching party for *112a loss rather than penalizing the breaching party. Under the Restatement Second test, courts have flexibility to respect the parties’ right to stipulate to damages for a breach but, when appropriate, prevent imposition of a penalty.

B. Application of Restatement Second § 356(1) to this case

¶ 16 The late fee provision in the promissory note here provides:

If any installment payable under this Note (including the final installment due on the Maturity Date) is not received by Lender prior to the calendar day after the same is due ... Borrower shall pay to Lender upon demand an amount equal to the lesser of (a) five percent (5%) of such unpaid sum or (b) the maximum amount permitted by applicable law to defray the expenses incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment....

La Sonrisa seeks 5% of the late balloon payment; “the maximum amount permitted by applicable law” is not at issue.

¶ 17 Dobson Bay, as the party seeking to avoid enforcement of the late fee provision, has the burden of persuading this Court that the provision imposes an unenforceable penalty. Cf. United Behavioral Health v. Maricopa Integrated Health Sys., 240 Ariz. 118, 122 ¶ 14, 377 P.3d 315, 319 (2016) (stating that the party claiming that a contractual arbitration provision is preempted by federal law bears the burden of proving it); Goode v. Powers, 97 Ariz. 75, 81, 397 P.2d 56, 60 (1964) (noting that a challenger to a contract bears the burden of showing illegality); Duenas v. Life Care Ctrs. of Am., Inc., 236 Ariz. 130, 136 ¶ 14, 336 P.3d 763, 769 (App. 2014) (concluding that party challenging a contract term bears the burden of showing unconscionability); see also DJ Mfg. Corp. v. United States, 86 F.3d 1130, 1134 (Fed. Cir. 1996) (“A party challenging a liquidated damages clause bears the burden of proving the clause unenforceable.”). To decide the matter, we do not apply any bright-line rules but construe the clause “according to the circumstances of the case, and in the light of all the facts surrounding it.” Miller Cattle, 38 Ariz. at 190, 298 P. at 643.

¶ 18 We review the grant of partial summary judgment de novo as an issue of law. See Cramer v. Starr, 240 Ariz. 4, 7 ¶ 8, 375 P.3d 69, 72 (2016). Whether a contract provides for liquidated damages or a penalty is also an issue of law we review de novo. See Rampello, 168 Ariz. at 300, 812 P.2d at 1118.

1. . Anticipated or actual damages

¶ 19 Dobson Bay argues that the late fee provision was neither a reasonable forecast of anticipated damages nor reasonably related to actual damages incurred as a result of the untimely balloon payment because La Sonrisa’s loss has been compensated already by payment of default interest and collection costs. La Sonrisa asserts that actual damages are irrelevant. It contends that when the loan was made, the 5% late fee was a reasonable forecast of just compensation for harm that could be caused by Dobson Bay’s default in timely making the balloon payment.

a. Anticipated damages

¶ 20 The late fee did not reasonably forecast anticipated damages likely to result from an untimely balloon payment.

¶ 21 First, the 6% fee is static, payable on demand whether the payment is one day late or one year late. Five percent of the loan principal is a significant sum of money, which did not likely reflect losses from a short delay in payment. Because the fee did not account for the length of time Canadian Imperial Bank would be deprived of the balloon payment, the fee could not reasonably predict the Bank’s loss. Cf. Miller Cattle, 38 Ariz. at 190, 298 P. at 643 (stating that a principal rule used to decide whether a contract imposes a penalty or liquidated damages is whether the payment “is a fixed and definite sum, regardless of the nature or extent of the breach of the contract, or whether it is based upon, and varies with, the nature and extent of the breach”); Grand Union Laundry Co. v. Carney, 88 Wash. 327, 153 P. 5, 7 (1915) (cited with approval in Miller Cattle, 38 Ariz. at 190, 298 P. at 643) (“[Ajnother feature that some times influ-*113enees courts to construe a provision for liquidated damages into a penalty [is that] of fixing for any one of several different kinds and degrees of breach an equal forfeiture of money.”).

¶22 La Sonrisa asserts that the 5% late fee did not necessarily establish a fixed sum of approximately $1.4 million as “[a]t the time the parties formed their agreement, the exact amount of the final installment was unknown because the loan documents provided Dobson Bay with the flexibility to pay all, some, or none of the principal prior to the maturity date.” But the note permits Dobson Bay to prepay the loan principal only “in whole” and “not in part,” except that any condemnation or casualty insurance proceeds would be applied to pay down the principal. Thus, unless Dobson Bay prepaid the entire principal amount, meaning the late fee provision would not apply, the parties contemplated that the balloon payment would approximate the entire loan principal, requiring a late fee of roughly $1,4 million for an untimely payment.

¶ 23 Second, the late fee either duplicated other fees triggered by a default or was grossly disproportionate to any remaining sums needed to compensate for the anticipated losses identified in the late fee provision. Cf. United Dairymen of Ariz. v. Schugg, 212 Ariz. 133, 138 ¶ 16, 128 P.3d 756, 761 (App. 2006) (“The right to recover liquidated damages is limited by the express terms of the parties’ agreement.”); 11 Joseph M. Perillo, Corbin on Contracts § 58.11 at 457 (rev. ed. 2005) (“The probable injury that the parties had reason to foresee is a fact that largely determines the question whether they made a genuine pre-estimate of that injury,...”).

¶ 24 The late fee is calculated as the lesser of 5% of the delinquent payment or the maximum amount permitted by law “to defray the expenses incurred by [Canadian Imperial Bank] in handling and processing such delinquent payment and to compensate [Canadian Imperial Bank] for the loss of the use of such delinquent payment.” It is debatable whether this quoted language qualifies each calculation method or just the latter one. But it matters not. Requiring an “either-or” comparison to fix the late fee suggests that both calculation methods were intended to compensate for the same categories of loss: (1) the costs in handling and processing a late payment, and (2) the loss of use of the payment. Cf. Smith v. Melson, Inc., 135 Ariz. 119, 121, 659 P.2d 1264, 1266 (1983) (“A contract should be read in light of the parties’ intentions as reflected by their language and in view of all the circumstances.”); State ex rel. Goddard v. R.J. Reynolds Tobacco Co., 206 Ariz. 117, 122 ¶¶ 23-24, 75 P.3d 1075, 1080 (App. 2003) (stating that words used in a contract must be read in context); see also In re MM. Ctr. E. Retail Prop., Inc., 433 B.R. 335, 344, 363 (Bankr. D.N.M. 2010) (interpreting almost identical language as stating the purpose for the late fee).

¶ 25 Both categories of loss identified in the late fee provision are substantially addressed elsewhere in the promissory note and deed of trust. Assuming that “handling and processing” includes actions taken to collect the late payment, those costs would be compensated by Dobson Bay’s required payment of “all costs of collection,” including reasonable attorney fees, and, in the event of foreclosure, “all expenses incident to such proceeding,” including attorney fees and trustee’s fees and costs. The loss of use of money would be compensated by continuing payments of regular interest plus default interest. Cf. Ariz. E.R.R. Co. v. Head, 26 Ariz. 259, 262, 224 P. 1057, 1058 (1924) (“Interest is the compensation paid for the use of money”).

¶ 26 What’s left to compensate by payment of a $1.4 million late fee? La Sonrisa and the dissent rely on an affidavit from Mitchel Medigovich, a commercial lending expert, who opined that a 5% late fee is a reasonable forecast of just compensation for impairment of a bank’s economic interests due to an untimely balloon payment. But much of this anticipated impairment falls outside the two categories of loss identified by the parties in the late fee provision. For example, Medigo-vich states that a predetermined late fee compensates for post-default “reputational risks,” “regulatory risks,” and the “risk of expense of preserving the collateral.” Medi-govich addresses the categories of loss identified in the late fee provision by stating that *114late fees properly subsidize a lender’s debt collection practices and compensate for the loss of expected funds. He does not explain, however, what amounts, if any, are reasonably needed to compensate for these expected losses when, as here, the borrower is already obligated to pay all collection costs and interest at both the regular rate and a default rate. Consequently, Medigovich’s affidavit does not persuade us that a flat $1.4 million late fee was a reasonable forecast of Canadian Imperial Bank’s anticipated losses from a late balloon payment that would not have been compensated by the payment of regular interest, default interest, and collection costs.

¶ 27 This case is distinguishable from Met-Life Capital Financial Corp. v. Washington Avenue Associates L.P., 159 N.J. 484, 732 A.2d 493 (1999), on which La Sonrisa and the dissent rely. There, the court concluded that a 5% late charge assessed against delinquent monthly installment payments of about $14,000 was enforceable as liquidated damages. Id. at 495-96, 502. The reasonableness of applying the charge against a final balloon payment was not at issue. See id. at 495 (“We now consider whether the five percent late charge assessed against each delinquent payment ... constitute^] reasonable stipulated damages provisions.”); see also MetLife Capital Financial Corp. v. Washington Ave. Assoc., L.P., 313 N.J.Super, 525, 713 A.2d 527, 531 (N.J. App. 1998) (stating that application of the late charge against a final balloon payment of about $69,000 was not at issue), affd in part, rev’d in part, 159 N.J. 484, 732 A.2d 493 (1999). Assessing a $700 late fee for an untimely installment payment may well reflect a reasonable assessment of the internal costs of monitoring and collecting late installment payments during the loan tenure. But that is a far cry from assessing a nearly $1.4 million fee for a delayed balloon payment of the loan principal, particularly given that the lender here was otherwise entitled to compensation for its collections costs and loss of use of the funds.

¶ 28 In sum, a flat 5% late fee did not reasonably predict the damages that would be sustained by Canadian Imperial Bank for a late balloon payment of the entire loan principal.

b. Actual damages

¶ 29 The $1.4 million late fee did not reasonably approximate either the actual costs of handling and processing the late balloon payment or the loss of use of that payment.

¶30 The summary judgment papers did not address the actual losses incurred by Canadian Imperial Bank and La Sonrisa after Dobson Bay’s default. Nevertheless, the record reflects that neither lender spent significant time handling and processing the late payment. The only outstanding payment was the last payment, and nothing suggests that either lender had much to “handle and process” before the trustee’s sale was initiated. Cf. In re Mkt. Ctr. E. Retail Prop., Inc., 433 B.R. at 364 (concluding that after default on a balloon payment “there would be little or no more administrative expenses in handling and processing delinquent payments” and “[a]ll that is left to do is have the attorneys sue to foreclose”). The note already required Dobson Bay to pay any collection costs, including attorney fees. It is inconceivable that any remaining administrative collection costs approached $1.4 million, particularly in light of the short time between the default and initiation of the trustee’s sale—about three months. Thereafter, the deed of trust applied to require Dobson Bay to pay attorney fees and trustee’s fees and costs.

¶ 31 La Sonrisa was also compensated for the loss of use of money suffered by it and its assignor, Canadian Imperial Bank, by Dob-son Bay’s obligation to pay regular and default interest. Cf. K.B. v. State Farm Fire & Cas. Co., 189 Ariz. 263, 267, 941 P.2d 1288, 1292 (App. 1997) (“An assignee steps into the shoes of her assignor.”). Dobson Bay was current on the loan until the maturity date. La Sonrisa did not dispute Dobson Bay’s representation at oral argument before this Court that La Sonrisa received between $600,000 and $700,000 in default interest alone for the six-month delay in paying the balloon amount.

¶ 32 In sum, nothing indicates that either lender, separately or together, suffered an *115uncompensated loss that approached $1.4 million.

2. Difficulty of proof of loss

¶33 We next consider the difficulty of proving the losses actually sustained by Canadian Imperial Bank and La Sonrisa in handling and processing the late balloon payment and by being deprived of use of that payment. Restatement Second § 356 cmt. b & illus. 2-4. In doing so, we examine the difficulty of either proving that a loss occurred or establishing its amount with certainty. Id. § 356 cmt. b.

¶ 34 La Sonrisa would have had no difficulty proving it sustained a loss in handling and processing the late balloon payment, if a loss occurred. (Because La Sonrisa noticed the trustee’s sale about a week after acquiring the loan, it may not have expended any resources handling and processing the balloon payment.) It could have produced evidence of the tasks undertaken by it to do so. La Sonrisa would have had slightly more difficulty precisely proving the amount of damages incurred from any such loss depending on what activities constituted “handling and processing” and how it allocated the costs of these activities. Cf. Garrett v. Coast & S. Fed. Sav. & Loan Ass’n, 9 Cal.3d 731, 108 Cal. Rptr. 845, 511 P.2d 1197, 1203 (1973) (invalidating a late fee provision and noting that “[t]he lender’s charges could be fairly measured by the period of time the money was wrongfully withheld plus the administrative costs reasonably related to collecting and accounting for a late payment”).

¶ 35 La Sonrisa would have had no difficulty proving that either lender sustained a loss by being deprived of the use of the balloon payment. Interest on the outstanding amount could have been assessed to compensate for the loss of use of money. Cf. Ariz. E.R.R. Co., 26 Ariz. at 262, 224 P. at 1058. And La Sonrisa would be entitled to collect interest earned when Canadian Imperial Bank was the note payee and the loan was in default. Cf K.B., 189 Ariz. at 267, 941 P.2d at 1292. Indeed, the promissory note required Dob-son Bay to pay regular interest and default interest for that purpose.

¶ 36 In sum, under the circumstances here, the difficulty of proving La Sonrisa’s loss as identified in the late fee provision was slight.

3. Consideration of factors

¶ 37 We are persuaded that the late fee is an unenforceable penalty. The difficulty of proving losses attributable to handling and processing the balloon payment was slight. We therefore give less latitude to Canadian Imperial Bank and Dobson Bay’s approximation of anticipated or actual harm. See Restatement Second § 356 cmt. b.

¶ 38 As explained, the late fee neither reasonably forecasted anticipated damages for the losses identified in the late fee provision nor reasonably approximated the actual losses. In view of Dobson Bay’s obligation to pay regular and default interest, collection costs, trustee’s fees and costs, and attorney fees as a consequence of the six-month delay in paying the balloon, an approximate $1.4 million late fee is unreasonable and an unenforceable penalty. La Sonrisa is not precluded, however, from seeking actual damages incurred for handling and processing the late balloon payment and for losing use of the payment if La Sonrisa has not already been compensated for that loss by the other fees and costs Dobson Bay is required to pay under the note and deed of trust. See Gary Outdoor Advert. Co., 133 Ariz. at 243, 650 P.2d at 1225.

C. The dissent

¶39 Our dissenting colleague colorfully compares our decision to a child’s cry of “backsies” to sidestep a promise. Rather than invoking playground rules, however, we apply long-established common law principles that render contractual penalty provisions— even when agreed upon by sophisticated parties—unenforceable as a matter of public policy. This is nothing unique. Courts will likewise disregard the parties’ intent and refuse to enforce contract terms that are unconscionable, illegal, or otherwise against public policy. Cf. Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. 82, 88, 907 P.2d 51, 57 (1995) (“[E]ven if the contract provisions are consistent with the reasonable expectations of the party they are unenforceable if they are op*116pressive or unconscionable(internal quotations and alterations omitted)); Goodman v. Newzona Inv. Co., 101 Ariz. 470, 474, 421 P.2d 318, 322 (1966) (recognizing “the fundamental right of the individual to [have] complete freedom to contract ... so long as his contract is not illegal or against public policy”). That the dissent prefers to ignore these principles does not affect their applicability,

¶40 The dissent is also incorrect that our decision runs afoul of the Arizona Constitution’s “contract clause,” article 2, § 25, an argument La Sonrisa has never made. Our colleague contends that we assign Dobson Bay a burden of persuasion that is so insubstantial it “impair[s] the obligation .of contract.” See infra ¶46. But judicial invalidation of a contract provision does not implicate the contract clause. Cf. Tidal Oil Co. v. Flanagan, 263 U.S. 444, 451, 44 S.Ct. 197, 68 L.Ed. 382 (1924) (finding no violation of the federal contract clause where a state supreme court declared a contract void and unenforceable because “the obligation of contracts against state action[ ] is directed only against impairment by legislation and not by judgments of courts”); Barrows v, Jackson, 346 U.S. 249, 260, 73 S.Ct. 1031, 97 L.Ed. 1586 (1953) (citing Tidal and holding that a state court’s refusal to enforce a racially restrictive covenant did not violate the federal contract clause); see also Fields v. Elected Officials’ Ret. Plan, 234 Ariz. 214, 218 ¶ 16, 320 P.3d 1160, 1164 (2014) (noting that the Court interprets Arizona’s contract clause using an “analysis similar to that employed by the Supreme Court” when interpreting the federal contract clause); Hall v. Elected Officials’ Ret. Plan, 241 Ariz. 33, 383 P.3d 1107, 1126 ¶ 69 (2016) (Bolick J., dissenting in part and concurring in the judgment in part) (noting, with regard to the state contract clause, that “[historically, Arizona courts have applied the United States Supreme Court's test for determining violations of the Contract Clause of the Federal Constitution”).

¶ 41 Even if the contract clause had been argued here and applies, it would not change our decision. The contract clause only limits the state’s ability to impair existing contract obligations; it does not curtail application of proscriptive principles that existed at the time of contract creation. Cf. State v. Direct Sellers Ass’n, 108 Ariz. 165, 169-70, 494 P.2d 361, 365-66 (1972) (“The [contract clause of the federal constitution] means only that no state may impair the obligation of an [ejxisting contract.’’); Foltz v. Noon, 16 Ariz. 410, 417, 146 P. 610, 512 (1915) (noting that a statute will not violate the Arizona Contract Clause “when applied to contracts made subsequent to its taking effect”); Samaritan Health Sys. v. Superior Court, 194 Ariz. 284, 293 ¶ 41, 981 P.2d 584, 593 (App. 1998) (“[Arizona’s] contract impairment clause only limits the legislature’s ability to impair obligations under existing contracts.”). Our cases proscribed penalty clauses long before origination of the loan here, and the note incorporated this proscription. Cf. Bhd. of Am. Yeomen v. Manz, 23 Ariz. 610, 615, 206 P. 403, 404 (1922) (“It is a familiar rule that the law in force at the time a contract is executed enters into and forms a part of the contract.”); Qwest Corp. v. City of Chandler, 222 Ariz. 474, 484 ¶ 34, 217 P.3d 424, 434 (App. 2009) (“[A]ll contracts incorporate applicable statutes and common-law principles.”). Consequently, our refusal to enforce a penalty provision did not impair the parties’ contract obligations here.

III. Conclusion

¶ 42 We vacate the court of appeals’ opinion, reverse the trial court’s partial summary judgment in favor of La Sonrisa on the liquidated damages claim, and remand to that court for further proceedings, including entry of partial summary judgment for Dobson Bay on its declaratory relief claim concerning the late fee. We award Dobson Bay its reasonable attorney fees pursuant to A.R.S. § 12-341.01 subject to its compliance with ARCAP 21(c).

BOLICK, J,,

dissenting.

¶ 43 As children, we learn that the rules of the playground dictate that if someone makes a promise, no matter how solemnly, it is unenforceable if the person making the promise had his fingers crossed behind his back. As we grow up, we learn instead that many promises are moral and legal obligations, with consequences properly attached *117to breaking them. Still, some grown-ups prefer the playground rules.

¶44 The Court today invalidates a core and unambiguous provision of a contract freely negotiated for mutual benefit between sophisticated parties represented by competent counsel. After Dobson Bay reaped the full benefits of its bargain, it defaulted on its repayment obligation and looked to the courts to avoid significant agreed-upon consequences of that default. The majority determines that the liquidated damages provision agreed to by the parties is an unenforceable penalty, based on its thorough examination of the Restatement (Second) of Contracts. Because I believe that over the course of that journey the majority lost the forest for the trees, I respectfully dissent.

¶ 45 The relevant provision of the Restatement (Second) is consistent with A.R.S. § 47-2718, which provides that a contract term “fixing unreasonably large liquidated damages is void as a penalty,” As with all statutes, we must construe this provision, if at all possible, in a constitutional manner. State v. Thompson, 204 Ariz. 471, 474 ¶ 10, 65 P.3d 420, 423 (2003).

¶ 46 Freedom of contract allows individuals to order their affairs and exchange goods and services, without coercion, in accord with their personal values and priorities. The Arizona Constitution so venerates contractual freedom that it is enshrined in our Declaration of Rights. Article 2, section 25 commands, “No ... law impairing the obligation of a contract, shall ever be enacted.” That provision requires us to indulge every presumption in favor of upholding a contract negotiated as this one was, and to assign a substantial burden of demonstrating unen-forceability to the party challenging the terms to which it willingly and knowingly agreed. The majority purports to assign the burden of persuasion to Dobson Bay, see ¶ 17, but that “burden” is so insubstantial as to transform § 47-2718 into “a law impairing the obligation of a contract.”

¶47 “The law of liquidated damages is unique within the common law of contracts because it overtly affronts freedom of contract.” Larry A. Dimatteo, A Theory of Efficient Penalty: Eliminating the Law of Liquidated Damages, 38 Am. Bus. L.J, 633, 634 (2001). That is because it allows courts to displace the intent of the parties by determining that a provision amounts to a penalty. Such discretion should be exercised with great care, for as the majority aptly notes, liquidated damages provisions “serve important purposes,” such as providing certainty when actual damages would be difficult to calculate and avoiding the costs and delays of litigation. See ¶ 8.

¶48 Moreover, “a party concerned foremost with performance, especially a timely performance, may use such a clause in the hope that it will provide a further inducement for performance.” Dimatteo, 38 Am. Bus. L.J, at 634, Certainly that is the case with the contract here. Dobson Bay sought a considerable loan—$28.6 million—to purchase four commercial properties. Under the contract terms, it would make interest-only payments for a prescribed period, after which it would repay the entire principal in a “balloon” payment. The timely return of the principal is a critical, indeed defining, feature of the loan. The contract underscored that fact by requiring, in addition to other fees described by the majority, a 5% fee for late interest payments or principal repayment. Absent evidence to the contrary by the party properly bearing the burden of proof, we may presume that the substantial loan Dob-son Bay sought would not have been made absent this assurance.

¶ 49 The lender was not voracious. Before the balloon payment was originally due in 2009, the parties negotiated a three-year extension. As the new date approached, the parties negotiated over another extension but failed to reach agreement. Thereafter the note was sold to La Sonrisa which then commenced foreclosure proceedings.

¶ 50 The majority applies two factors in determining whether the liquidated damages provision is “reasonable”; the anticipated or actual loss caused by the breach, and the difficulty of proof of loss. See ¶ 12. Proving the provision is reasonable based on actual damages makes little sense in most instances, given that the point of a liquidated dam*118ages provision is to avoid litigation that requires proving actual damages. Accordingly, the proper inquiry “is whether the stipulated amount was, when all of the facts are considered, reasonable at the time of the contract and not whether it was reasonable with the benefit of hindsight.” Rampello, 168 Ariz. at 300, 812 P.2d at 1118. At the same time, citing a comment to Restatement (Second) § 366, the majority notes that if the difficulty of forecasting actual damages is great, considerable latitude is appropriate in assigning liquidated damages. Although the difficulty of forecasting the amount of loss here was great, the majority extends no such latitude.

¶ 61 The majority concludes that the lender is compensated for losses owing to a dilatory final payment elsewhere in the contract; specifically, through collection costs and foreclosure expenses. See ¶25. Further, “[t]he loss of use of money would be compensated by continuing payments of regular interest plus default interest.” Id. Given that we have no idea the use to which the lender would have put the money had it been returned in a timely manner, that conclusion is conjecture, and illustrates precisely why liquidated damages provisions are preferable to protracted litigation and judicial second-guessing.

¶ 52 The main cost to the lender of failing to recover the loan corpus in a timely fashion, and the most difficult to calculate in advance, is opportunity cost. La Sonrisa produced a declaration from Mitchel Medigo-vich, who has extensive experience as an Arizona trustee and real estate broker and originator. He attests that when a borrower unilaterally extends the due date of a balloon payment, it imposes costs, including opportunity costs, upon the lender. He likens the situation to a car rental company with a fixed fleet of cars. If a renter unilaterally extends a rental even by one day, it diminishes fleet availability and the ability to provide new rentals, which has economic ripple effects throughout the enterprise.

¶ 53 Medigovich summarized the consequences of a late final payment and the purpose of a liquidated damages provision:

Many lenders including banks make projections for expected and scheduled repayment of loans with which the lender makes interest payments to depositors, new loan commitments to prospective borrowers, bond payments to investors or to replenish capital reserves. In any event, failure of the borrower to make any scheduled payment including a payment due upon maturity of the loan, particularly in the case of [a] large commercial loan such as in this case puts the lender at great risk of default of its own commitments.... Consequently, in most commercial transactions, the parties agree that if the Borrower fails to make a final payment of principal on the due date, (a unilateral extension), the economic impact to the Lender is incalculable and therefore a Late Fee is necessary as liquidated damages to the lender.

¶ 54 Such late fees are not a penalty because (1) “[a] lender with a non-performing loan has significantly increased risk of recovery,” (2), “in addition to the expense of managing the non-performing asset, the lender is denied the ability to reinvest expected ... payments into new performing investments at current market rates” (emphasis added), and (3) “the lender may be at risk of defaulting on other loan commitments wherein funding is contemplated by the loan maturing.” Whether any or all of those factors will occur in a particular loan context is unpredictable, and the cost of possible lost opportunities is inherently difficult to calculate.

¶55 Consequently, Medigovich observes, customary late fees for commercial transactions typically start at 4% or 5% and range up to 10%. In Medigovich’s view, the 5% fee here was “perhaps below what is reasonable for the circumstances,” which involved “a complex transaction with multiple properties as the collateral and multiple entities as the Borrower.”1

*119¶ 56 Thus, even though La Sonrisa did not bear the burden of proving that the liquidated damages provision was reasonable, it supplied powerful evidence that the economic damages flowing from default or delayed final payment were potentially substantial, difficult to forecast or calculate, and not fully encompassed by other fees in the contract.

¶ 57 In contrast, Dobson Bay, the party that purportedly bore the burden of proof, presented by way of contravening evidence: absolutely nothing.2

¶ 58 Unsurprisingly, the trial court, which weighed the evidence presented by La Sonri-sa and the absence thereof by Dobson Bay, concluded that the liquidated damages provision was enforceable. The court of appeals, by contrast, held that as a matter of law, “absent unusual circumstances,” a 5% liquidated damages provision in a contract like this is unenforceable. Dobson Bay, 239 Ariz. at 140 ¶ 22, 366 P.3d at 1030. The court cited neither law nor precedent for such a sweeping substantive pronouncement, although at least it provided a clear rule to which contracting parties could conform themselves.

¶59 The majority’s opinion here is more legally grounded but also far more nebulous. Is a default fee based on a percentage amount per se invalid because it does not vary with the duration of the default, even though amount-based late fees may not fully compensate for lost opportunity costs; or do the parties have to litigate every time to find out, which defeats the important purposes of liquidated damages clauses? Either way, the economic consequences may be severe. As La Sonrisa’s expert attested, again unrebutted by the party ostensibly bearing the burden of proof, percentage-based liquidated damages provisions for late balloon payments are common components of commercial loan contracts. Every single one is now in legal purgatory.

¶ 60 I prefer the approach taken by the New Jersey Supreme Court in MetLife, 732 A.2d at 499, which is more faithful to the Restatement and protective of freedom of contract. MetLife involved a contract containing percentage-based late and default fees as liquidated damages, in addition to collection and various other fees. Id. at 495-96. At trial, MetLife’s expert testified that a 5% late fee was the industry custom and standard, and was a reasonable forecast of costs including “lost investment opportunities.” Id. at 496. Unlike here, the party challenging the provision actually produced contrary evidence. Id. at 497. The trial court found both the late fee and a 12.55% default fee represented reasonable liquidated damages. Id. The court of appeals reversed for reasons similar to those in the majority opinion here. Id. at 497-98.

¶61 The Supreme Court reversed the court of appeals. It began by noting that a “need for close scrutiny arises from the possibility that stipulated damages clauses may constitute an oppressive penalty.” Id. at 498. But the court should assess such provisions on a “continuum; the more uncertain the damages caused by a breach, the more latitude courts give the parties on their estimate of damages.” Id. The court held that “liquidated damages provisions in a commercial contract between sophisticated parties are presumptively reasonable and the party challenging the clause bears the burden of proving its unreasonableness.” Id. at 499.

¶ 62 Applying those standards, the court concluded that the 5% late fee was reasonable because (1) “[i]t seems evident that late payments on larger loans would present a greater risk to the lender” given that they constitute a larger portion of a lender’s portfolio, and (2) “damages resulting from the *120loss of investment opportunity increases with the size of the late installment payment,” thus “a lender suffers both larger administrative and ‘opportunity cost’ damages when a borrower is late with a larger payment.” Id. at 500. Because operational “costs are spread over an entire loan portfolio, it is difficult to identify specific damages attributable to the late payment or default of one specific borrower.” Id.

¶ 63 Given the difficulty in forecasting damages from late payment or default, the court looked to what was permitted by statute “and what constitutes common practice in a competitive industry.” Id. The testimony that 5% was the industry standard was (as here) uncontradicted. Id. By contrast, cases in which fixed-percentage liquidated damages provisions were struck down “involved unusually large percentages or explicit evidence of a coercive intent.” Id. at 501-02 (citing cases).

¶ 64 The court also sustained the 12.55% default interest rate. “As with the costs of late payments, the actual losses resulting from a commercial loan default are difficult to ascertain.” Id. at 503. “The lender cannot predict the nature or duration of a possible default,” nor “is it possible when the loan is made to know what market conditions might be” at time of default or “what might be recovered from a sale of the collateral.” Id. “For example, a lender cannot know what its own borrowing costs will be if a borrower defaults ... nor accurately predict what economic return it will lose when the borrower fails to repay the loan on time.” Id. Because the 12.55% default interest rate “appears to be a reasonable estimate of potential damages, falls well within the range demonstrated to be customary, and because a stipulated damages clause negotiated between sophisticated commercial entities is presumptively reasonable,” the court sustained it, Id.

¶ 65 Our Court likewise should presume that a liquidated damages provision negotiated by sophisticated parties is valid and conclude that the party bearing the burden of demonstrating its unreasonableness failed to sustain that burden in this case. Instead, we reward the party breaching the contract by removing a critical term to which it assented and, as a necessary consequence adding both insult and injury, require the non-breaching party to pay its attorney fees. Our decision will inevitably have a corrosive effect on the making and enforcement of contracts in Arizona, with predictable and substantial adverse economic consequences, notwithstanding that freedom of contract is enshrined in our organic law. With great respect to my colleagues, I dissent.