Can Businesses Recover Consequential Damages in a Breach of Contract Claim in Florida?
Through a breach of contract claim, a non-breaching party can seek compensation for damages. In Florida, consequential damages may be recovered in a breach of contract claim. However, a business can only seek consequential damages as a remedy if it can prove that those losses were foreseeable. Within this article, our Miami commercial litigation lawyer explains the key points to understand about recovering compensation for consequential damages in a breach of contract claim in Florida.
What are Consequential Damages (Breach of Contract)?
Broadly defined, consequential damages in a breach of contract case refer to losses that do not flow directly and immediately from the breach but result from the breach’s particular effects on the plaintiff’s situation. These damages are intended to compensate the non-breaching party for indirect losses that were foreseeable at the time the contract was made. Examples of include:
- Lost profits;
- Additional operational costs; and
- Reputational damage.
Know the Law in Florida: Consequential Damages Only Recoverable if Foreseeable
Consequential damages are recoverable through a breach of contract claim in Florida. However, these damages are only recoverable if they were foreseeable at the time the contract was executed. The legal standard requires that the potential damages must have been contemplated by both parties as a probable result of the breach. To successfully claim consequential damages in Florida, the plaintiff must prove that the defendant could reasonably have anticipated the damages as a result of failing to fulfill the contract. Without foreseeability, there is no liability.
Understanding the Reasonable Foreseeability Standard
To best understand how consequential damages work in a breach of contract claim in Florida, it is useful to consider some hypothetical examples. Here is an overview of the legal standard:
- Foreseeable Consequential Damages: Imagine that a bakery in Miami agrees to deliver 500 custom cakes for a major corporate event. The contract specifies delivery three days before the event to ensure freshness. If the bakery fails to deliver on time and the corporate event organizer has to make a last-minute, far more expensive purchase from another bakery. The additional costs would be a foreseeable consequential damage. Both parties could predict that failing to deliver the cakes on time would require a costly replacement.
- Unforeseeable Consequential Damages: On the other hand, imagine that the same bakery in Miami failed to perform the contract. However, in this example, because the cakes were not delivered on time, the event organizer had to cancel a promotional event with a celebrity who was supposed to endorse the cakes. If the endorsement deal and its specific conditions were not disclosed to the bakery at the time of the contract, the loss from this cancellation would not be deemed reasonably foreseeable.
Contact Our Miami, FL Breach of Contract Attorney Today
At Pike & Lustig, LLP, our Miami commercial litigation attorneys handle the full range of contract disputes. If you have any questions about consequential damages in breach of contract claims, please do not hesitate to contact us today. With a law office in Miami and another office in West Palm Beach, we provide business law representation throughout South Florida.
