Consequential Damages
Consequential damages are indirect losses that occur as a result of an event, such as a breach of contract. Unlike direct damages, which are immediate and obvious, consequential damages arise from special circumstances surrounding the event. For example, if a delay in delivery causes a business to lose future sales, those lost sales are considered consequential damages. These damages can be more complex to prove, as they depend on the specific situation and how the initial issue impacts further outcomes. Understanding these damages is crucial for assessing the full impact of a problematic incident or contract violation.
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Consequential damages are financial losses that occur as a result of a failure to fulfill a contract or obligation, but are not directly caused by the breach itself. For example, if a delivery of goods is delayed, resulting in lost sales or additional costs for the buyer, those losses can be considered consequential damages. Unlike direct damages, which are immediate and easily traceable, consequential damages are secondary and often depend on specific circumstances or impacts that arise from the initial failure. They highlight the broader effects that a breach can have on a party's financial situation.