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Understanding Consequential and Liquidated Damages Part 1

If you work in the construction industry, you have likely worked on a project that has experienced some form of breach of contract that has resulted in damages for the non-breaching party. In the event of a breach of contract, whether or not the damages suffered are direct or indirect, contractors deserve to be compensated. If you are a contractor and you have suffered damages on a construction project because of a breach of contract by an owner please contact a Jacksonville construction attorney today.

In the following four-part article, we will discuss two of the most popular types of damages involved in breach of contract cases: consequential and liquidated damages. We will first cover consequential damages in this article and in the following one. In the third and fourth section, we will cover liquidated damages. As Jacksonville construction attorneys that specialize in breach of contract cases, we are here to assist you with any of your legal needs.

The Difference Between Direct and Consequential Damages

Direct damages occur frequently and relate to issues like unpaid contracts, repair costs for faulty craftsmanship, and other common construction site issues. Direct damages are easy to dispute in a legal context as they are the damages that have directly affected the non-breaching party’s compensation due to a breach of contract. Consequential damages can have a direct impact on the non-breaching party as well; however, these damages result from some form of an unpredictable or uncommon circumstance of events. Often referred to as special damages, consequential damages may go beyond the language established in the contract.

Consequential Damages for Contractors

During a project delay, a contractor can incur a variety of overhead damages for services, equipment, and materials used; however, perhaps the most costly damage they experience are the contract opportunities they missed out on because a project was delayed significantly resulting in extra time on the job. This is a perfect example of damages that were experienced because of consequential damages. These damages pertain to the types of foreseeable misfortunes that the contractor could directly experience that go beyond the straightforward damages they experienced on the jobsite.

If you would like to speak with one of our Jacksonville construction attorneys, please contact us at 904.425.5030, or submit our contact request form.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.