What is the Definition of Consequential Damages?
Consequential damages are defined as such damage, loss, or injury that does not flow directly and immediately from the act of the party, but only from some of the consequences or results of such act. Lost profits are recognized as a type of consequential damages. In breach of contract cases, consequential damages are recoverable when they were fairly within the contemplation of the parties. Although recovery will not be denied merely because the amount of damages is hard to determine, damages must not be left to speculation and conjecture.
Consequential damages are those that are not a direct result of an act, but a consequence of the initial act. To be awarded consequential damages in a lawsuit, they must be a foreseeable result of an act. In a contractual situation, consequential damages resulting from the seller’s breach include any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover (obtaining a substitute) or otherwise.