Direct vs. Consequential Damages in Virginia Breach of Contract Litigation | Ryan C. Young | Richmond, Virginia Attorney

Two Broad Categories of Damages in a Virginia Breach of Contract Lawsuit

There are two broad categories of damages ex contractu: direct, or general, damages and consequential, or special, damages. Direct damages are those which arise “naturally” or “ordinarily” from a breach of contract; they are damages which, in the ordinary course of human experience, can be expected to result from a breach. Consequential damages are those which arise from the intervention of “special circumstances” not ordinarily predictable. If damages are determined to be direct, they are compensable. If damages are determined to be consequential, they are compensable only if it is determined that the special circumstances were within the “contemplation” of both contracting parties. Whether damages are direct or consequential is a question of law. Whether special circumstances were within the contemplation of the parties is a question of fact. Roanoke Hosp. Asso. v. Doyle & Russell, Inc., 215 Va. 796, 214 S.E.2d 155 (1975)

Direct (General) Damages in Virginia Breach of Contract Cases

Direct Damages are relatively obvious to those who have entered into a contract, and furthermore, would be foreseeable to any reasonable lay person.  For example, let’s assume you have entered into a contract with a local construction company to have your bathroom remodeled. In the middle of the job, after you have paid more than half of the contracted job, the contractor drops out of contact leaving your bathroom nonfunctional. You have abided by the terms of the agreement by making diligent payments, but the contractor has breached the contract by not providing the agreed upon materials and services. Any reasonable person would understand that damages are deserved.

Consequential (Special) Damages in Virginia Breach of Contract Cases

Consequential Damages are damages that result from unexpected or special circumstances that neither party expected at the outset of the agreement. For example, let’s say you own a bakery that has successfully been in business for a year, and you’ve planned a big anniversary celebration with sales for your valued customers.  You have contracted with an advertising company to promote the sale, but the company fails to deliver promotional pieces on the agreed upon date, and the email blast was sent out late as well. As a result, your big celebration turned out to be lackluster, and you have excess perishable inventory. What are the damages?  It is hard to quantify exactly what the damages might be because you have expended additional resources to increase inventory, and you have lost revenue from potential sales. You may be entitled to consequential damages.

Richmond, Virginia Business Attorney | Breach of Contract Litigation

Written by 

Related posts