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What Are Consequential Damages?

Consequential damages, also known as “special damages” is a type of compensation awarded not to the direct damage of an act but predictable damages caused by the initial act. It is an injury or harm which does not arise directly from the immediate act, but only as a result from the act in question. Consequential damages may be awarded when the loss is not caused by the direct act of the defendant but instead is the consequence of the wrongful behavior. For example, if a person from the third floor building was cleaning the window and accidentally dropped a vase on the head of a person who just happened to pass by, the compensatory damages may be awarded to that passerby not due to the injuries he may have sustained, but for the head trauma or perhaps an amnesia that may have been a result of the said incident. The consequential damages are based on resulting harm on the person’s normal life or perhaps career and are not based on the direct result of the negligence. A compensation or monetary award may be issued to the plaintiff for the loss of income that may have been a consequence of the wrongful doing. Consequential damages should be measured by monetary value.

A consequential damage also is common in cases of contractual disputes or insurance claims. If a contract is breached, this could involve expenses reasonably incurred in inspection, receipt, transportation in accordance with the contract documents that may lead to the contractor’s liability for an enormous loss. For example, if a contractor does not finish the work on time, there may be financial consequences that may be foreseeable at the time of the contract signing that could result to loss of income to the other party.

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