Definition of consequential damages
Further reading
Consequential damages, otherwise known as special damages, is one of the damages, the other being direct damages, that may be awarded to plaintiff in a civil action who claims that terms of an agreement were not honored.
When a contract is breached, the recognized remedy for an owner is recovery of damages that result directly from the breach, such as the cost to repair or complete the work in accordance with the contract documents, the loss of value of lost or damaged work. Consequential damages (also sometimes referred to as indirect or �special� damages), include loss of product and loss of profit or revenue and may be recovered if it is determined such damages were reasonably foreseeable or "within the contemplation of the parties" at the time of the contract. This is a factual determination that could lead to the contractor's liability for an enormous loss. For example, the cost to complete unfinished work on time may pale in comparison to the loss of operating revenue an owner might claim as a result of late completion.
References:
- Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.
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