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{{a|g| | {{a|g|{{image|Dramatic Look Gopher|gif|DID SOMEONE SAY [[Consequential loss|CONSEQUENTIAL LOSS]]??}}{{loss v damages}} }}''Not to be confused with [[direct 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}}). Let us take an example: | |||
{{quote|Under a contract I agreed to rent you my car for the weekend. You failed to pay the agreed rental. As this is an breach of contract, I sue. | |||
'''[[Direct loss]]''': My 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”. | |||
Had I not | '''[[Consequential loss]]''': Had I not committed to rent you my car, I could have rented it to someone else ''for more money''. My “consequential loss” is the extra income I could have earned doing that. also, I could have used it myself, and earned money as, I don’t know — a limo driver. This is generally harder to get your head around. Almost everything about this is speculative, including what I was planning to do with the car in the first place. I could have rented a car elsewhere (at exactly, or less than, my [[direct loss]]) and mitigated my ''consequential'' loss 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 in the contemplation of the parties — that authority is {{casenote|Hadley|Baxendale}}. |