Consequential loss: Difference between revisions

Consequential loss (view source)

Revision as of 14:11, 18 December 2019

197 bytes added , 18 December 2019

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,891

edits

@@ Line 1: / Line 1: @@
-{{a|g|[[File:Dramatic Chipmunk.png|thumb|center|450px|Seems like a suitable place for the ''[[dramatic look gopher]]''. DID SOMEONE SAY CONSEQUENTIAL LOSS??]]}}[[Consequential loss]], sometimes called [[indirect loss]], [[relational economic loss]], [[loss of opportunity]] or [[loss of profits]] is a loss arising from a [[breach of contract]] not caused ''directly'' by the breach, but as a second-order consequence of it: such as the [[opportunity cost]] to the innocent party of having a {{t|contract}} with you which you did not then perform.
+{{a|g|[[File:Dramatic Chipmunk.png|thumb|center|450px|Seems like a suitable place for the ''[[dramatic look gopher]]''. DID SOMEONE SAY CONSEQUENTIAL LOSS??]]}}[[Consequential loss]], sometimes called [[indirect loss]], [[relational economic loss]], is a loss arising from a [[breach of contract]] not caused ''directly'' by the breach, but as a second-order consequence of it: such as the [[opportunity cost]] to the innocent party of having a {{t|contract}} with you which you did not then perform.
+''It is not the same as a [[loss of opportunity]] or [[loss of profits]]: these may be direct losses or indirect losses, depending on the contract (see {{casenote|Hadley|Baxendale}}).
 Had I not been committed to rent you my car, I could have rented it to someone else ''for more money''.
 *'''[[Direct loss]]''': is the rental income you were supposed to pay me for the rental period. It is predictable, finite, determinate and easy the parties to hold in contemplation. “If I can’t go through with this the worst I can be stuck with is the cost of renting that car for a week”.
-*'''[[Consequential loss]]''': the marginal extra income I could have earned had I not rented you the car at all, but rented it to someone else who was prepared to pay more for it. Or the money I could have made with the car, had you performed your contract and rented it to me. This is generally harder to get your head around. “Well, I was planning to be a free-lance limo driver, and I was going to worked non-stop, twenty-four hours a day for the whole period, only driving punters who were paying me £20 pounds a mile”. Almost everything about this is speculative, including what the claimant was planning to do with the car in the first place. It could have rented a car elsewhere (at exactly, or less than, its direct loss) and mitigated its ''consequential'' loss entirely without bothering the party in breach.
+*'''[[Consequential loss]]''': the marginal extra income I could have earned had I not rented you the car at all, but rented it to someone else who was prepared to pay more for it. Or the money I could have made with the car, had you performed your contract and rented it to me. This is generally harder to get your head around. “Well, I was planning to be a free-lance limo driver, and I was going to worked non-stop, twenty-four hours a day for the whole period, only driving punters who were paying me £20 pounds a mile”. Almost everything about this is speculative, including what the claimant was planning to do with the car in the first place. It could have rented a car elsewhere (at exactly, or less than, its [[direct loss]]) and mitigated its ''consequential'' loss entirely without bothering the party in breach.
+In the old days, there was some authority that [[consequential loss]] was not recoverable at all, unless specifically in the contemplation of the parties — that authority is {{casenote|Hadley|Baxendale}}.
-In the old days, there was some authority that [[consequential loss]] was not recoverable at all, unless specifically agreed. These days, the extent of [[damages]] are guided generally by the usual rules regarding foreseeability, [[causation]] and [[remoteness of damage]], but in most cases, [[consequential loss]] will fail these tests—especially foreseeability—and are unlikely to be recoverable in an ordinary action for [[breach of contract]], at least in the absence of an [[indemnity]].
+These days, the extent of [[damages]] are guided generally by the usual rules regarding foreseeability, [[causation]] and [[remoteness of damage]], but in most cases, [[consequential loss]] will fail these tests—especially foreseeability—and are unlikely to be recoverable in an ordinary action for [[breach of contract]], at least in the absence of an [[indemnity]].
-Not so any more: see below.
 ===[[Indemnities]]===