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Consequential Damages
Consequential damages are financial losses that happen as an indirect result of someone's wrongful act or breach of contract, not from the act itself but from its later effects.
What it actually is
They are also called special damages, and they cover losses like lost profits or additional costs caused by the other party's failure. In a case, they appear when a plaintiff asks for compensation beyond the direct harm, and the court examines whether the losses were reasonably foreseeable and traceable to the defendant's conduct. The party seeking them must prove both the amount and the causal link.
Why it matters in your case
It matters because even if you win on liability, you may not recover these losses unless you specifically asked for them and proved they were foreseeable. Conversely, if you are defending, the scope of consequential damages can dramatically increase what you owe, so the issue shapes settlement and trial strategy.
The common misunderstanding
People often confuse consequential damages with direct damages, but direct damages are the immediate value lost (like repair costs), while consequential damages are the ripple effects (like business income lost while the item is unusable). Another common mistake is assuming all lost profits are automatically recoverable; they are only recoverable if they were reasonably foreseeable.
Get the actual rule
Definitions are orientation; rules are authority
This page explains the concept. When it matters to your case, read the rule that governs it in your court — we hold Texas, federal and Washington court rules word for word, and every state's official resources are on the state pages. If someone cites a case at you, check that it exists first.
Related
Terms that travel with this one
General explanation, not legal advice, and not specific to any state — procedures and deadlines vary by jurisdiction and court. If you can get a lawyer or free legal aid, do: every real option.