Consequential loss: Difference between revisions

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-{{g}}[[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 is a second-order consequence of it: such as the [[opportunity cost]] to the innocent party of having a contract with you which you then breached.
+{{a|g|[[File:Dramatic Chipmunk.png|thumb|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 is a second-order consequence of it: such as the [[opportunity cost]] to the innocent party of having a contract with you which you then breached.
 Had I not been committed to rent you my car, I could have rented it to someone else ''for more money''.
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 ===Indemnities===
 Pay particular attention to [[indemnities]]. where not [[Well-crafted indemnity|well-crafted]], as many are not, indemnities are oddly susceptible for consequential losses, because [[indemnities]] do not require a [[breach of contract]], and the usual rules of remoteness and foreseeability do not (in theory) apply. Badly constructed indemnities are likely to be treated rather like contractual breaches however, but where an indemnity is very wide (as many are) it is not controversial to exclude liability for consequential and indirect losses, and if your counterparty baulks at this, most likely she doesn’t really understand indemnities. Many lawyers don’t.
+Trying to recovering [[consequential losses]] for [[breach]] through sneaky [[indemnities]] is dick behaviour, basically, and another reason one should never agree to indemnities for [[breach of contract]].
 ''There is more — much more — on this topic at the [[indemnities]] article.''
-===When consequential losses are foreseeable: [[stock lending]]===
+===When [[consequential losses]] ''are'' foreseeable: [[stock lending]]===
 Sometimes consequential losses ''are'' within the parties’ reasonable contemplation, they are easy enough to calculate, and it is fair enough to include them. Such as, upon a failure to settle a [[stock loan]]. The failure to make the onward delivery might incur a {{gmslaprov|buy-in}} cost from the onward recipient.
-===where consequential loss is the only realistic loss you can claim: - the [[confidentiality agreement]]===
+===When [[consequential losses]] are all you can realisticallt claim: [[confidentiality agreement]]s===
-The accursed [[NDA]] where, if you can really claim [[contractual damages]]<ref>[[Damages]] arising from misuse of [[intellectual property]] aren’t at their core, [[contractual damages]], because [[intellectual property]] rights don’t arise by {{tag|contract}} — well, not a [[confi]] at any rate.</ref> at all, they are all likely to consequential and speculative in nature. The chap who had your client list and used it to win business you aspired to win yourself has, at worst, caused you a consequential loss: the loss of profits from that business. But more likely {{sex|she}} has not caused your [[loss]] at all: ''you'' have, through your crappy product. <br>
+The accursed [[NDA]] where, if you can really claim [[contractual damages]]<ref>[[Damages]] arising from misuse of [[intellectual property]] aren’t at their core, [[contractual damages]], because [[intellectual property]] rights don’t arise by {{tag|contract}} — well, not under a [[confi]] at any rate.</ref> at all, they are all likely to [[Consequential loss|consequential]] and speculative in nature.
-===[[Remoteness of damage]]===
-It is sometimes, erroneously, said that [[consequential loss]] is not recoverable under ordinary [[contractual damages]] principles. The test of “[[remoteness of damage]]” is “[[foreseeability]]”—or “what was in the reasonable contemplation of the parties”. Now it is true that in many cases [[consequential loss]] is ''not'' in the reasonable contemplation of the parties. But this is not necessarily so: sometimes it is, as the example above points up quite nicely:
-In this case it would be clearly contemplated that the failure to deliver the taxi would lead to a loss of income, and provided that loss could be sensibly quantified (a different question) it would quite conceivably be covered.
-Explicitly seeking indemnification for [[damages]] that ''may'' not be covered by ordinary remoteness principles risks creating an argument, where before there was none, and winding up in a worse position that you otherwise would be. “Consequential” losses ''may'' be recoverable in contract as long as they are reasonably foreseeable and in contemplation of the parties, which may well be true in the case of hedging losses and the like. But if you specifically seek to include [[consequential losses]], the Skinnerian response of most lawyers is to reject it out of hand. If you sought an [[indemnity]] just for ordinary contractual losses, you might be able to include sufficiently foreseeable consequential losses.
+The chap who had your client list and used it to win business you aspired to win yourself has, at worst, caused you a consequential loss: the [[loss of profits]] from that business. But more likely, {{sex|he}} has not “caused” your [[loss]] at all: ''you'' have, through your crappy product. Look, I’m just the messenger, okay?<br>
 {{sa}}
 {{casenote|Hadley|Baxendale}}