Recovery requires foreseeability at contracting under Hadley. Lost profits on collateral transactions, business interruption, and reputational loss are typical categories.
The direct and consequential boundary is frequently contested.
Alternative Names:
Special Damages|Indirect Loss
Why it Matters?
Characterization determines whether a waiver applies, and lost profits may be direct where they represent the contract's own expected benefit but consequential where they arise from separate transactions the breach disrupted. Courts divide on the characterization, which makes a waiver that enumerates specific excluded categories substantially clearer than one relying on the label alone.
Frequently Confused with
Related terms
Frequently asked questions
When are lost profits direct rather than consequential?
How is the ambiguity addressed?
