reassessing the consequences of consequential damages

Direct damages are usually simpler, more direct, and easier to handle in court. (Click here for a copy.) it.”9 A classic example of consequential damages is lost profit on collateral business arrangements. [5] Glenn D. West and Sara G. Duran, Reassessing the "Consequences" of Consequential Damage Waivers in Acquisition Agreements, 63 The Business Lawyer 777, 780 (May 2008). 2. Many times a party will want to exclude consequential and special damages from recovery. Requirements for Recovery of Consequential Damages The degree of proof as to the amount of damages is high-er for consequential damages than for direct damages, and consequential damages must be pled with greater specificity. In Corporate Issues. • Reassessing the “Consequences” of Consequential Should the waiver apply to any con-tract indemnities? Generally, consequential loss (also called indirect loss) is the non-dominant loss from a breach of contract. … Consequential damages are a type of compensatory damages. Sellers, on the other hand, should consider expressly limiting recoverable losses under their indemnification provisions to the “normal measure” of contract damages. Prezzybox.com is not liable for product misuse or indirect, special or consequential damages. 2. It makes little sense to have them also define the boundary between direct and consequential damages. Buyers should never agree to waivers of “diminution in value” or “multiples of earnings” damages. Consequential damage waivers are a frequent part of merger and acquisition agreements involving private company targets. Buyers and sellers often negotiate the scope and types of damages subject to indemnification under the purchase agreement, including whether consequential damag… In this case, the insured sought direct and consequential damages from its insurer, stemming from Hudson’s denial of Panasia’s claim for water damage to its commercial building. The Uncertain Consequences of Waiving Consequential Damages in M&A Agreements. Even the term “indirect” damages is preferable to the term “consequential” damages for a buyer. (Click here for a copy.) Time for Insurers To Face the Consequences of Consequential Damages The First Department issued a clear decision that policyholders may recover the consequential damages… [5] Glenn D. West and Sara G. Duran, Reassessing the “Consequences” of Consequential Damage Waivers in Acquisition Agreements, 63 The Business Lawyer 777, 780 (May 2008). In theory, the definition of consequential damages is not that complicated, but in application, the results become muddled. While a plaintiff wants an award, a defendant does not because the indirect results of having breached a contract can have a far-reaching impact on the defendant. 2. In contracts for the sale of goods, sellers rely on waivers of non-direct or special damages to limit their risk. [6] Id. A defendant is liable to a plaintiff for all the natural and direct consequences of the defendant’s wrongful act, with respect to compensatory damages. Since consequential damages are considered “special” damages, Federal Rule of Civil Procedure 9(g), as well as several state courts, requires parties to “specifically plead” consequential damages. consequential damages waiver and its supposed equivalents, the extensive and continued use of excluded losses provisions is so ubiquitous in the mergers and acquisitions (M&A) deal world that this author has determined that a little re-threshing of this old straw may well be justified if even a few remaining grains * Glenn D. West is a Dallas-based partner with Weil, Gotshal & Manges LLP. Consequential loss doesn’t have a precise definition in Australian law. Eco-friendly garden implements were a new concept in the market place and sales had been very good. Id. The words “consequential and special losses” excluded liability only for damages falling within the second limb of the rule in Hadley v Baxendale and therefore claims (ii) and (iii) fell within the first limb. Keywords: consequential danages, incidental damages, indemnification, Suggested Citation: However, the remote consequences of a defendant’s act or omission cannot form the basis for an award of compensatory damages. 2. Even though consequential damage waivers are a frequent part of merger and acquisition agreements involving private company targets, we believe that few deal professionals understand the concept of consequential damages and, as a result, the inclusion of such waivers may have an unexpected impact on both buyers and sellers. [7] Id. 2. Toll Free: 800.975.9468 (Continued on page 2) Fax: 216.241.4520 Direct Damages, Consequential Damages & Liquidated Damages: A Brief Review by Robert Gavin We often are asked “What is … The court stated that such “consequential damages” are recoverable if they were contemplated and foreseeable by the parties at the time of contracting and are reasonably ascertainable. In our article, Reassessing the “Consequences” of Consequential Damage Waivers in Acquisition Agreements, which was recently published in The Business Lawyer, we provide clarity on the issue of Consequential Damages. Law. Consequential damages are defined as: “damages that do not flow directly or immediately from some act or occurrence, but from the consequences or results of the act or occurrence.” Consequential damages arise out of special circumstances that are typically unpredictable and are typically more expensive than direct damages. What Are Consequential Damages? 2. This post comes from Glenn D. West and Sara G. Duran of Weil, Gotshal & Manges. Consequential damages, otherwise known as special damages, are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation, a breach of contract. 6. at 807. Therefore, when attempting to prove consequential damages, if a party does not specifically plead those damages, then the evidence of those damages would be inadmissible. Negotiating Delay Risks: Consequential Damages, Liquidated Damages and Limitations of Liability in Construction Contracts Stein Ray LLP 222 West Adams Street • Suite 1800 Chicago, IL 60606 312.641.3700 sstein@steinraylaw.com Presenter:JeffAppelbaum www.steinraylaw.com ThompsonHine 10/27/2015 1. 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