In any business contract, both parties are beholden to their promises and agreements under penalty of serious fees. If one party breaches one of the terms in a contract, the other party could recover incidental damages to compensate them for lost income and other expenses.
So, what exactly are incidental damages, and how can you tell whether your business qualifies to recover them? Read on for more information, or learn more from the experienced attorneys at Schwartzapfel Lawyers. You can contact us online or call 1-516-342-2200 for a free case evaluation today!
What Are Incidental Damages?
Incidental damages are a type of damage specified by the United States Uniform Commercial Code (UCC). In a nutshell, incidental damages are damages incurred due to a breach of contract.
For example, if a vendor suddenly decides to breach a contract it has with a retail company, and the retail company loses sales, the retail company can claim those sales as incidental damages. Incidental damages require:
- A contract or agreement established prior to the occurrence in question
- The contract to have been breached in some way
- The breach has led to measurable damages, such as lost income, property damage, expenses, and/or fees
In this way, incidental damages are those that incidentally appear as a result of actions from another party. They aren’t accidental, per se, although they may not necessarily be intentional. In point of fact, incidental damages can only follow from the action or lack of action from some contractual partner (e.g., a business, client, or other service).
What Is Considered A Breach Of Contract?
A breach of contract is any violation of the terms and conditions of a binding legal document. Examples of breaches in contract include but are not limited to:
- Late payments on bills or loans
- Failure to deliver a promised asset
- Stopping a contract or deliveries prior to an agreed-upon time
A breach of contract can happen with written and oral contracts alike. Technically, there are two (2) types of breaches of contract:
- Minor breaches of contract happen when a business or vendor doesn’t receive an item or service by an agreed-upon date. For example, if a tailor agrees to have a garment ready to be worn by a certain date, but it’s not ready for the client, they are technically in breach of contract.
- Material breaches of contract occur when a person or party receives something other than what was stated in the agreement. For instance, a supplier delivers (400) boxes of supplies instead of (500) boxes of supplies to a retail organization.
In either case, breaches of contract can have dire consequences for the victimized party. Businesses may not have the products or supplies they need, and individuals may not get the services or products they purchased or expected.
To learn more now at no charge, call Schwartzapfel Lawyers today and speak directly with one of our skilled personal injury attorneys. Simply dial 1-516-342-2200 and allow us the honor and privilege of fighting for you™!
What Are The Common Costs Of Incidental Damages?
In many cases, incidental damages apply to breaches of commercial contracts (e.g., between businesses and clients or other businesses). As such, common types of incidental damages may also apply to business contexts, including but not limited to:
- Fees for item inspections
- Fees for care or transportation of items
- Commissions or other expenses that are connected to delays in shipping or item receipt
- Defective items
- Storing of items for longer than expected
Note: In certain cases, incidental damages can be understood by separating them into the respective damages of the seller(s) and buyer(s). On this front, a seller’s incidental damages may include:
- Delivery stops
- Transportation, care, and/or custody of goods after a buyer’s breach of contract
- Returning or reselling previously purchased goods
Alternatively, a buyer’s incidental damages may consist of:
- Fees associated with inspecting or receiving goods that are later rejected
- Caring for and taking custody of goods that are later rejected
- Charges associated with replacing purchased goods that arrived with defects or other issues
In any event, incidental damages typically only occur because of some breach of contract or action on the part of the defendant. They cannot, by definition, occur naturally.
That said, if a party incurs damages or is compelled to cover expenses related to comparable circumstances, it does not automatically classify as incidental damages unless there is intervention or action by another party involved.
For instance, if a shipment is late because of something like the weather or a freak storm, the “at-fault” party will likely not be liable for damages. They can claim an act of God and point to the fact that they did everything right, despite the shipment not appearing at its intended destination on time.
What Is An Example Of Incidental Damages?
Let’s take a look at incidental damages in a hypothetical scenario so you can better understand what exactly these damages entail.
Imagine a circumstance where a vehicle seller reports a false version of the repair and operational history of the vehicle in a logbook. The buyer of the vehicle relies on that logbook when they purchase the vehicle. However, several months after buying the vehicle, the new buyer notices that there are severe mechanical errors that shouldn’t be present according to the maintenance records on file.
Because of this, the buyer could be entitled to incidental expenses if the vehicle breaks down, charges other expenses related to fees or regulations, etc. If they take the vehicle to a repair shop and have to pay a bill, they could potentially get that bill covered through incidental damages if they take the previous seller to court.
Note: This is just one hypothetical way in which incidental damages can be covered. If you want to know whether you are entitled to incidental damages, you should contact Schwartzapfel Lawyers right away at 1-516-342-2200or visit us online to schedule your free case evaluation.
Don’t wait! Your future is too important to leave to chance. Act now and callSchwartzapfel Lawyers today!
Incidental Damages vs. Consequential Damages
While incidental damages and consequential damages do share certain similarities, there’s one big difference between them: the cause of the loss or expense for the victim.
Remember, incidental damages are always the direct result of one party or another breaching a contract. Consequential damages are more indirect. They might not occur as a result of a breach of contract, but they could result because of the consequences of that breach.
For example, if a product supplier fails to fulfill its contractual duties to provide a retail organization with a certain number of products, the retail organization might not be fined right off the bat. However, they could take the supplier to court for consequential damages, as they may disappoint customers and miss out on a certain number of sales if they don’t have the expected amount of stocked products.
When Do Incidental Damages Apply To Legal Cases?
Incidental damages typically apply to legal cases concerning contractual agreements between two (2) or more parties. More often than not, those parties are businesses or other commercial organizations.
However, incidental damages can also apply to instances where a business breaches a contract with a client, including sometimes an individual customer. Therefore, incidental damages are not just limited to commercial violations and fees. They can apply to many different cases and circumstances.
Why Speak To Seasoned Lawyers About Incidental Damages?
You should speak to skilled lawyers about incidental damages whenever you believe you may be entitled to them. Commercial law can be very complex, and it can be tough to know whether a business, client, partner, or other party is liable for a lawsuit or has any liability whatsoever.
The right legal team will take a hard look at the details of your case in order to:
- Determine whether incidental damages are recoverable on your part
- Assess whether filing a lawsuit is a wise idea based on factors such as the favorability of the available evidence
- Meticulously gather evidence on your behalf
- Properly fill out and file paperwork on your behalf
- Zealously represent you in court
- Provide sound counsel throughout the entire legal process
Here, you should note how these benefits feed into one another. Moreover, with a dedicated legal team working for you, you’ll experience peace of mind, and you’ll know that you have the greatest opportunity possible to recover any entitled damages.
Contact Schwartzapfel Lawyers Today
Depending on the circumstances of your case, you may be entitled to incidental damages if a business partner or some other party in a contract breached the agreement. Still, it can be difficult to know which incidental damages you might be entitled to and what those damages will likely total without qualified legal guidance.
Schwartzapfel Lawyers is well-equipped and ready to assist with your case when you give us a call today. Our knowledgeable attorneys are more than seasoned; they’re among the most trusted representatives in the area and possess more than 150 years of combined experience.
For more information or to schedule your free case evaluation, call us now at 1-516-342-2200or contact us online today!
DISCLAIMER: Nothing on this page should be considered legal advice. You should seek the appropriate counsel your situation requires. For more information, call 1-516-342-2200 now!
Sources:
Schwartzapfel Lawyers, P.C. | Fighting For You™™
incidental damages | Wex | US Law
Breach of Contract Explained: Types and Consequences | Investopedia
Incidental Damages – Definition and Examples | Legal Dictionary
