Direct loss

The basic principles of contract →Go uptown Quick reminder: in the law of contract “losses” and “damages are” different, though related things. Losses are pecuniary misfortunes that you might suffer as a result of a breach of contract. They can be divided into: “Direct” losses, that are the natural and foreseeable consequence of breach of contract. “Indirect” or “consequential” losses, which are a more speculative nature. Note that “loss of profit” and “loss of opportunity” are not judicially recognised categories of loss: they can be either direct — for example, foregone interest on a defaulted payment — or indirect — the winnings you would have got from putting that defaulted payment on a rank outsider who came good in the 2:35 at Kempton — but if in doubt (i.e., not a natural consequence of the breach) assume they will be indirect Damages are the amounts a court orders a naughty counterparty to pay to an innocent to compensate for its loss of bargain (in a contract) or atone for its wrongdoing (in a tort or breach of trust). They may, or may not, be the same amount as the actual losses suffered: “General” damages compensate for direct losses. “Special” damages relate to indirect losses. They are rare in contracts, even when not specifically excluded which, in finance contracts, they usually will be. “Punitive” or “exemplary” damages do not compenstate for loss at all, but rather punish a wrongdoer for outrageous behaviour. These are not available under English contract law but may be awarded — extremely rarely — in tort or for breach of trust. There is also an “Account for profit”: an order to hand over profits made through the misuse of someone else’s physical or intellectual property. This remedy is not available for a simple breach of contract. Grievances and remedies, charted Grievance Remedy Contract Tort Fiduciary Direct loss General damages Yes Yes Yes Indirect/consequential loss Special damages Usually No Usually No Usually No Egregious wrongdoing Exemplary/punitive damages No Yes Possibly Profiting at owner’s expense Account for profit No Yes Yes Formation: capacity and authority · representation · misrepresentation · offer · acceptance · consideration · intention to create legal relations · agreement to agree · privity of contract oral vs written contract · principal · agent Interpretation and change: governing law · mistake · implied term · amendment · assignment · novation Performance: force majeure · promise · waiver · warranty · covenant · sovereign immunity · illegality · severability · good faith · commercially reasonable manner · commercial imperative · indemnity · guarantee Breach: breach · repudiation · causation · remoteness of damage · direct loss · consequential loss · foreseeability · damages · contractual negligence · process agent Remedies: damages · adequacy of damages ·equitable remedies · injunction · specific performance · limited recourse · rescission · estoppel · concurrent liability Not contracts: Restitution — quasi-contract — quasi-agency Index: Click ᐅ to expand: Contract Tort Restitution Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

The reasonably foreseeable direct result of a fellow’s breach of his contract. Do be contrasted with indirect, or consequential, losses. See the panel for our reminder about the difference between losses and damages.

See also

• contractual damages
• consequential loss