Are indirect and consequential damages the same?

What is the difference between direct and indirect damages?

Direct damages or “general damages” flow directly and without interruption from the type of wrong alleged in a complaint. By contrast, indirect or consequential damages are losses that are removed from the breach and usually involve an intervening event that causes the damage.

What are the 3 types of damages?

Are special damages indirect?

Indirect damages (also called special damages) are those the parties, with their intimate knowledge of the deal, would expect the non-breaching party to incur. Examples of indirect damages fall into two categories, incidental and consequential damages.

Which is an example of a consequential or indirect loss?

Till the owner purchases a new set of machinery, the operations will remain halted. This loss due to the halting of daily business operations is an example of consequential loss as it is an indirect loss. It is not covered under the insurance for direct losses.

What are the four types of damages?

Are direct damages consequential damages?

Direct damages are damages resulting directly from a breach of the contract whereas consequential damages are damages that are not directly caused by the breach but normally and naturally arise from the circumstances of the non-breaching party.

What is consequential damages in law?

According to Black's Law Dictionary, consequential damages are “losses that do not flow directly and immediately from an injurious act but that result indirectly from the act.”

What is a consequential loss example?

A consequential loss is an indirect loss that accompanies an insured loss, for example the loss of earnings arising from a property fire, experienced by a business insured against fire.

Are third party claims indirect damages?

A party's out-of-pocket costs for damages recovered by a third party shall be deemed to be indirect damages suffered by such party, except to the extent such damages are part of a claim for which indemnification is due under Section 4.

What are consequential damages in tort?

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. They must be causally related to the injury and provable with a reasonable degree of certainty.

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.

What is meant by indirect loss?

Indirect or consequential loss (second limb) is a loss which arises from particular and unusual circumstances that the parties knew or should have known about at the time the contract was entered in to, and do not flow naturally from the breach.

What is meant by consequential loss?

Definition of 'consequential loss'

A consequential loss is a loss that follows another loss that is caused by a danger that has been insured against. The loss of ongoing profit because of the inability to continue trading is a consequential loss.

What is included in consequential loss?

If you breach a contract, it will likely result in a loss for one or all parties to the contract. The loss in a contract which both parties reasonably foresee at the time they enter into the contract is called consequential loss and is typically limited or excluded from liability in the contract.

Are liquidated damages consequential damages?

The parties should be careful to guard against the recovery being overly disproportionate to actual damages. Thus—should the agreed amount of liquidated damages be in gross excess of actual consequential damages—courts have generally construed the provision for liquidated damages to be an unenforceable penalty.

What are the 2 types of compensatory damages?

There are two types of compensatory damages—general and actual. Actual damages are intended to provide funds to only replace what was lost. General compensatory damages awarded are more complex, as these compensatory damages do not represent a monetary expenditure.

What are the different types of damages?

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

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 ...

What is the opposite of consequential damages?

In general terms, direct damages immediately stem from the contractual breach, while consequential damages are still related to the breach but without a direct correlation. Consequential damages often entail a deeper knowledge of a contract and its terms.

Are exemplary damages consequential?

Consequential Damages means all exemplary, punitive, special, indirect, consequential, remote or speculative damages, including loss of profit, loss of revenue or any other special or incidental damages, whether in contract, tort (including negligence), strict liability or otherwise, whether or not the Person at fault ...