Examples of indirect damages fall into two categories: incidental and consequential damages. Incidental damages are the associated costs that a business incurs due to a party's default, such as additional labor costs. Indirect damages are the result of non-compliance and are often unique to the business circumstances of the party that has not breached the obligation, for example, loss of profits and late damages. Since these damages are not as reasonably foreseeable when the parties contract as direct damages, most of the time they are excluded in statute of limitations.
Incidental damages, especially consequential damages, may be speculative and require the drafting party to consider excluding them from the limitation of liability clause. Because the purpose of contractual remedies is generally to recover the party that has not breached the contract, the law allows various types of damages (money paid) to reflect the losses suffered by the party that has not breached the contract. Since the purpose of contract law is compensation and not punishment, traditionally no punitive compensation has been awarded, with an exception when the breach of contract is also a tort for which compensation for punitive damages can be recovered. On the other hand, other damages, personnel costs and lost profits of a start-up depend on other factors that may not be typical or common for other companies in this situation.
Here are five types of breach-of-contract damages in the Lone Star State and how Massingill business law attorneys can help. According to the UCC, consequential damages are damages resulting from non-compliance by the seller, including (a) any loss resulting from the buyer's requirements and needs that the seller had reason to know at the time of the contract and that could not be reasonably prevented through coverage or otherwise; and (b) damage to persons or property that immediately results from any breach of warranty. Unlike compensatory and consequential damages, which compensate for specific financial losses, incidental damages focus on reimbursing the party that hasn't breached the costs of the violation. Limitation of liability clauses generally exclude compensation for indirect or consequential damages for delays, lost profits, expenses, rents, insurance premium payments and attorney fees, because they are speculative and difficult to be quantified at the time of hiring.
Or, once again, the loss of sales resulting from not repairing the manufacturer's machine in time or from physical and material injuries due to a faulty machine sold by the promisor would be addressed with the consequent damages. Civil liability law allows for punitive damages (in all but four states) when the behavior is malicious or deliberate (reckless conduct that causes physical harm, deliberate defamation of a person's character, knowingly illegal appropriation of someone's property), and some types of breach of contract are also wrongful. For example, if Ralph does a poor plumbing job in Betty's bathroom and the toilet is leaking, damaging the floor, the ceiling on the ground floor and the carpet on the ground floor, Ralph would have to pay for those losses in consequential damage. In Texas, to recover damages resulting from a breach of contract, the party that has not breached the contract must meet several requirements.
Generally, consequential damages include property damage, personal injury, attorney fees, loss of profits, loss of use, buyer liability to customers, loss of goodwill, interest on money held by customers, and damages related to third-party claims. Incidental damages include the costs derived from the return or disposal of non-compliant products, the interruption of the provision, the mitigation of damages and fees for legal advice or other professional services directly related to the correction of the non-compliance. Damages paid to directly compensate the offending party for the value of what was not done or executed are compensatory damages. In the contract, damages paid to compensate the offending party for the direct loss suffered.
You may understand that this provision is intended to eliminate the liability of the software vendor (the licensor) for such damages if there is a problem with the product in question. This means that a richer person can be slapped with much more serious punitive damages than a poorer person in the appropriate case.