Consequential damage refers to the indirect or secondary harm that occurs as a result of a particular event or action. In legal terms, it typically refers to the financial losses or damages that are not directly caused by the defendant’s actions, but are a foreseeable consequence of those actions. Consequential damages may include lost profits, loss of business opportunities, or other economic losses that result from the defendant’s breach of contract or negligence. In order to recover consequential damages, the plaintiff must demonstrate that such damages were reasonably foreseeable and directly caused by the defendant’s actions.
Consequential damages, also known as special damages, are a type of remedy sought by the plaintiff against the defendant for harm resulting from the defendant’s actions. These damages need not directly arise from the defendant’s wrongful act but naturally flow from the act, as explained in the case of Haynes & Boone v. Bowser Bouldin (para. 182)
Consequential damages, also referred to as special damages, are sought in civil court as a remedy for contract breaches. These damages arise when one party to a contract fails to fulfil their obligations.
To illustrate consequential damages, let’s consider a hypothetical scenario:
Abe and Bob enter into a contract for Abe to sell his magazine store to Bob. The contract contains a provision allowing Bob to withdraw from the agreement without penalty if the store is damaged before the final real estate closing. A month before the closing, the building sustains minor fire damage that can be easily repaired. Despite the minor nature of the damage, Bob decides to back out of the contract, constituting a breach. The consequential damages in this case would be the lost profits suffered by Abe due to the failed sale of his store.
Consequential damages are characterised by specific elements:
- These damages go beyond the direct losses incurred by the non-breaching party.
- They are not typically foreseeable or expected in the ordinary course of business by a reasonable person.
- Commonly, consequential damages include lost profits resulting from a contract breach.
Consequential damage refers to the indirect or secondary losses that occur as a result of a breach of contract or other legal wrongdoing. It includes financial losses, lost profits, and damages to reputation or business relationships.
Yes, consequential damages can be recovered in a lawsuit if they were reasonably foreseeable and directly caused by the breach or wrongdoing. However, the specific circumstances and terms of the contract will determine the availability and extent of recovery.
Yes, there may be limitations on recovering consequential damages, depending on the jurisdiction and the terms of the contract. Some contracts may include clauses that limit or exclude liability for consequential damages.
To prove consequential damages, you will typically need to provide evidence that demonstrates the causal connection between the breach or wrongdoing and the indirect losses suffered. This may involve financial records, expert testimony, or other relevant evidence.
Yes, parties to a contract can agree to waive or exclude consequential damages through specific contractual provisions. However, such provisions must be clear and unambiguous to be enforceable.
Direct damages are the immediate and foreseeable losses that directly result from a breach or wrongdoing. Consequential damages, on the other hand, are the indirect losses that flow from the breach or wrongdoing but are not the immediate result.
Yes, consequential damages can be recovered in a personal injury case if they are a direct result of the injury. For example, if a person’s injury prevents them from working and earning income, the lost wages would be considered consequential damages.
Yes, consequential damages can be recovered in a breach of warranty case if they were reasonably foreseeable and directly caused by the breach. This may include costs incurred due to the defective product or losses suffered as a result of the breach.
Yes, consequential damages can be recovered in a negligence case if they were a foreseeable consequence of the negligent act or omission. However, the plaintiff must prove that the damages were caused by negligence and were not too remote or speculative.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 28th April 2024.
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