Are consequential damages actual damages?

Asked by: Aliyah McClure  |  Last update: October 22, 2022
Score: 4.1/5 (15 votes)

Consequential damages are not direct damages but are damages that necessarily arise from the specific nature of the breach of contract.

What type of damages are consequential damages?

Consequential damages, otherwise known as special damages, are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation, a breach of contract.

What is included in actual damages?

Actual damages refer to the financial amount that is paid to a victim that suffered loss that can be calculated. Actual damages are often known as real damages or, legally, as compensatory damages. These are damages that arose from the neglect or mistake of another party.

Are consequential damages a type of compensatory damages?

Consequential damages (also known as special damages) are another form of compensatory damages. Special damages do not flow directly and immediately from the defendant's act, but from some of the consequences of the act.

What is the difference between consequential and indirect damages?

Consequential damages are damages that proximately result from a breach of a contract. Consequential damages are also commonly referred to as “indirect damages” because they arise indirectly from a breach due to various events that flow from a breach.

Consequential Damages Versus Actual Damages

29 related questions found

Are consequential damages recoverable?

Also called special damages, since they result from a breach of contract and yet would not necessarily be incurred by every injured party experiencing that breach. Consequential damages are generally not recoverable in contract disputes, but are recoverable in tort. See General damages (contrast).

Are consequential losses recoverable?

By definition, therefore, consequential losses are exceptional and often not recoverable. Direct loss is the natural result of the breach in the usual course of things. Most foreseeable kinds of loss are direct, including financial losses such as loss of profits and loss of business or goodwill.

What is the difference between actual and compensatory damages?

Actual damages are intended to provide the monetary amount necessary to replace what was lost and nothing more. Usually, compensatory damages are awarded in civil court cases in order to compensate for damages, injury, or another incurred loss.

Are consequential damages indirect damages?

Consequential damages vs indirect damages

Consequential damages are also referred to as special damages or indirect damages. Such indirect damages are damages that do not necessarily flow from the breach of contract but are secondary in nature or indirect to breach.

What is the difference between actual damages and special damages?

In tort law, special damages are damages like car dents or medical expenses that can actually be ascertained, and they are contrasted with general damages, which refer to damages for things like intentional infliction of emotional distress which do not have a set monetary cost.

What are the four types of damages?

One of the most common remedies comes in the form of damages, or monetary awards, which are further broken down into four general categories.
  • Compensatory Damages. Compensatory damages (or “actual damages”) are specifically meant to make up for the plaintiff's losses. ...
  • Punitive Damages. ...
  • Liquidation Damages. ...
  • Nominal Damages.

What are the 6 types of damages?

There are six different types of damages: compensatory, incidental, consequential, nominal, liquidated, and (sometimes) punitive.

What are the 3 types of damages?

Types of Damages
  • COMPENSATORY. Compensatory damages are generally the most identifiable and concrete type of damages. ...
  • GENERAL. General damages are sought in conjunction with compensatory damages. ...
  • PUNITIVE. Punitive damages are meant to punish a Defendant for particularly egregious conduct.

Are direct and actual damages the same?

Direct Damages means actual damages or losses suffered by me or any other party (if caused by you) and shall not include any compensation for special, punitive, indirect, incidental or consequential damages or losses, including but not limited to loss of profits, business or value, whether or not foreseeable.

Why are consequential damages excluded?

Exclusions of consequential damages are among the most common and important provisions in a wide variety of contracts. They can significantly reduce the breaching party's liability, sometimes by staggering amounts of money.

Can consequential damages be disclaimed?

Commercial contracts typically include a consequential damage disclaimer, but one reason to resist such a disclaimer may simply be to avoid contentious and expensive litigation to determine whether a party's damages were direct or consequential in nature.

What are considered indirect damages?

Indirect damages are those that do not occur as the direct result of the accident but, rather, because of other damages that the victim incurred. For example, lost wages, loss of earning capacity, and loss of household productivity are just a few examples of indirect damages.

What are the 3 types of compensatory damages?

First, it's critical to understand the two types of compensatory damages.
  • Actual (or Special) Compensatory Damages. ...
  • General Compensatory Damages. ...
  • Calculating Compensatory Damages. ...
  • Punitive Damages.

What are the 5 types of damages?

There are six different types of damages: compensatory, incidental, consequential, nominal, liquidated, and (sometimes) punitive.

Can you receive both compensatory and punitive damages?

Judges or juries can award punitive damages in addition to compensatory damages in some lawsuits. California Civil Code 3294 allows juries to award them – but the victim in the case has to prove that the defendant's conduct amounted to malice, oppression or fraud, such as when the case involves intentional harm or ...

When can you claim consequential loss?

A party who suffers loss as a result of the breach of contract can claim damages. Damages are awarded to put the party affected by the breach in the same financial position as if the breach had not occurred.

How do you explain a consequential loss?

A consequential loss is an indirect adverse impact caused by damage to business property or equipment. A business owner may purchase insurance to cover any damage to property and equipment, and may also obtain coverage for secondary losses.

What is an actual loss?

What Is Actual Total Loss? Actual total loss is a loss that occurs when an insured property is destroyed or damaged to such an extent that it can be neither recovered nor repaired for further use. Often, an actual total loss triggers the maximum settlement possible according to the terms of the insurance policy.

Who is liable for consequential damages?

Consequential (indirect) damages are those that do not flow directly from the breach but instead are a secondary or indirect consequence of the breach. These occur when a party breaches a contract and is liable for all foreseeable losses incurred by the other party.

What three 3 Things Must a court consider in reviewing punitive damages?

To ensure that unconstitutional punishment is not imposed in the form of punitive damages, the Court has set forth three "guideposts" for courts to consider in reviewing punitive damages awards: "(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm ...