Consequential loss: Difference between revisions

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-{{a|g|[[File:Dramatic Look Gopher.gif|thumb|center|450px|DID SOMEONE SAY [[Consequential loss|CONSEQUENTIAL LOSS]]??]]}}''Not to be confused with [[direct loss]]''
+{{a|g|{{image|Dramatic Look Gopher|gif|DID SOMEONE SAY [[Consequential loss|CONSEQUENTIAL LOSS]]??}}{{loss v damages}} }}''Not to be confused with [[direct loss]]''
-{{loss v damages}}
+[[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.
-[[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.
-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}}).
+'''[[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 been committed to rent you my car, I could have rented it to someone else ''for more money''.
+'''[[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. }}
-*'''[[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.
 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}}.