As part of a contract suit, general damages are contractual losses, including losses resulting from the withholding of money or the difference between contract prices and market rates. Incidental and consequential damages, however, have distinct legal meanings under the Uniform Commercial Code (“UCC”) and need to be separately disclaimed by a disclaimer of damages. [10] PNC relied on the decision in Biotronik v. Conor Medsystems Ireland, in which the New York Court of Appeals held that the plaintiff's lost profits resulting from a breach were direct damages because they were "clearly contemplated" under the parties' agreement. at 5) (original in uppercase and boldface). Under the circumstances of this case, we hold that it can. PNC argued that the refund and audit expenses it incurred due to the malfunction were direct damages, as opposed to consequential damages, owed by WKFS under the terms of the agreement. (slip op. The contract is governed by New York law and contains a provision barring the recovery of “consequential” damages. [20] - Id. D.K. Consequential Damages: Injury or harm that does not ensue directly and immediately from the act of a party, but only from some of the results of such act, and that is compensable by a monetary award after a judgment has been rendered in a lawsuit. In particular, there is an established body of New York … – Direct damages are intended to compensate the plaintiff for losses that result naturally from the breach. at 7-9). Damages for breach of that duty include both the value of the claim, and consequential damages, which may exceed the limits of the policy, for failure to pay the claim within a reasonable time (see Panasia Estates v Hudson Ins. 2 As the New York Court of Appeals stated in Met. United States: Recovery of Hedging Losses as Consequential Damages in New York Arbitration 09 March 2011 . Examples include lost profits, reduced value of a piece of real estate, and lost bonding capacity. They must be both foreseeable and directly connected to the breach of contract. [19], The court questioned why PNC had not sought to recover its direct damages, which would have been equal to the amounts directly paid by PNC to WKFS for the allegedly malfunctioning system. The variety of liability limitation provisions, both by type and scope, are legion. They apply whether the disagreement is between the project owner and general contractor or the general contractor and one of their subcontractors. Co., 10 NY3d 200, 203; Bi-Economy Mkt., Inc. v … at 17). This is especially important because, theoretically, a contractor could enter into a contract valued at $2 million and end up defending a consequential damage claim for a lot more. Disclaimer | Site Map | Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters. If the breach is due to the contractor or subcontractor passing away before work is complete, liquidated damages are not recoverable, although actual consequential damages may be pursued. “consequential damages”, however, lacks a precise definition, and thus, the question whether certain types of damages are recoverable in light of a consequential damages bar is a recurring subject of high-stakes litigation. (slip op. '"[12] According to the court, PNC licensed software from WKFS to deliver documents to its customers, and PNC, on its own and without WKFS's input, charged its customers for this service, and further chose to refund customers certain fees and conduct an audit when a possible breach arose. at 24) (citing Schonfeld v. Hilliard, 218 F.3d 164, 177 (2d Cir. On August 3, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in AGE Group, Ltd. v. 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