Construction. Fax: 210.212.5698 Coats Rose, P.C. | In our example, absent a waiver in the lease or other contract, an allowable Consequential damage would be the lost profit because the store was closed, but not the extra meeting costs because no landlord would reasonably have contemplated that its tenant would be holding a national employee’s meeting at this particular store? Owner consequential damages under the AIA waiver include rental expenses, losses of use, profit, financing, business or reputation, and loss of management or employee productivity. 411 E. Franklin Street, Suite 600 There is a second reason for concern about the distinction between consequential and direct damages. | Fax: 972.702.0662, Terrace 2 General damages, also known as "consequential damages," are the natural and foreseeable results of a breach. Austin, Texas 78746 If the law does not provide a simple or understandable distinc-tion between direct damages and consequential damages, the parties are left to time-consuming and expensive legal proceedings. Richmond, VA 23219 Phone: 713.651.0111 Toll Free: 800.535.2701, 14755 Preston Road Owner consequential damages under the AIA waiver include rental expenses, losses of use, profit, financing, business or reputation, and loss of management or employee productivity. direct and consequential damages. Tenant’s Waiver of Consequential Damages. injury or property damage claims (which generally are insurable) and also is not limited to third party claims (so a claim by the landlord against the tenant for property damage is within the scope of this definition). Phone: 513.830.0261 A little background on contract law is necessary. The A201 mutual waiver clause has aggravated a perplexing problem — how to define “consequential damages,” the subject of the waiver. A firm believer in active legal risk management throughout the life of a project, he advises clients during the negotiation and formation of contracts, throughout the construction of a project and, if necessary, in resolving disputes through mediation, arbitration or litigation as necessary to bring a project to conclusion. This website uses cookies to provide the user with an optimal experience. Toll Free: (866) 788-1190 This includes cookies for access to secure areas and CSRF security. Phone: (804) 697-2000 The failure resulted in a breach of contract. 201 E. 5th Street, Suite 1810 Do: Negotiate a waiver of consequential damages – “Neither party shall be liable for consequential, incidental or similar damages arising hereunder or pursuant to the terms hereof, including, but not limited to, loss of business, lost profits, loss of use and similar damages.” Don’t: Cave in on this issue. Mutual Waiver of Consequential Damages. Consequential damages can be enormous. 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