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Consequential Damages

Consequential Damages

What Are Consequential Damages?

Damages to an owner's business indirectly resulting from a breach of contract and which are generally foreseeable but not defined at the start of a project. For example, delays in the completion of a project for a manufacturing company result in the company's inability to complete contracts for its customers.

More In-depth Definition of Consequential Damages

Consequential Damages are indirect or secondary losses that arise as a result of a breach of contract or other events. Unlike direct damages, which are immediate and quantifiable, consequential damages include losses such as lost profits, business interruption, or additional expenses incurred due to the initial breach. These damages are often more complex to calculate and require careful consideration of the chain of events leading to the loss.

Example of Consequential Damages

Costs incurred due to a contractor's delay.