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Consequential loss: Difference between revisions
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Had I not been committed to rent you my car, I could have rented it to someone else ''for more money''. | 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. | *'''[[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 | *'''[[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 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]]. | 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]]. | ||