Consequential damages refers to harm suffered by a party in a civil case as a result of that party’s unique circumstances.
Consequential damages are not caused directly by the act of the injuring party, but from the consequences of the injuring act. Often, consequential damages are limited to injuries that were sustained as a direct foreseeable result of wrongdoing.
Consequential damages are most often at issue in torts and breach of contract cases. In these cases, it is usually easy to determine the injury or harm caused directly by the act of the injuring party. But determining the injuries sustained indirectly can be the subject of extensive litigation.
One of the oldest examples used to demonstrate the nature of consequential damages involves a man throwing a log onto a public street. It is easy to determine that the man is liable for injuries caused by the log striking another person. The man may also be liable to an injured person who trips over the person struck by the log because the tripping is a consequential result of the log being thrown into the street. The man may be liable under the consequential damages doctrine for the tripping even though it was not the direct result of the man’s act of throwing the log into the street.