When discussing civil lawsuits, what do consequential damages refer to?

Consequential damages refer specifically to the financial losses that are a direct result of a wrongful act or breach of contract, which extends beyond direct damages. These damages are also often referred to as "special damages" because they require proof that they were incurred as a consequence of the defendant's actions. For instance, if a business suffers lost profits due to another party's breach of contract, those lost profits would be considered consequential damages.

It's important to note that while actual damages address the direct losses incurred, consequential damages consider the secondary effects of that loss, therefore highlighting their broader impact. This distinction is crucial in the legal context, as it enables plaintiffs to seek compensation for a wider range of impacts resultant from the defendant’s unlawful actions.