Also known as: incidental damage
Written by attorneys · grounded in primary & secondary sources — see below
Expenses reasonably incurred by an aggrieved party in response to the other party's breach of a contract for the sale of goods. These outlays arise directly from actions such as stopping delivery, storing or caring for goods after rejection or repudiation, effecting cover, or arranging resale.
Ironclad Industries contracted to sell custom machinery to Irene Ingalls. After Ironclad manufactured and identified the goods, Irene repudiated. Ironclad incurred storage and insurance costs while holding the machinery. Those storage and insurance costs qualify as incidental damages recoverable by the seller.
Insight Consulting ordered specialized servers from Innovate Pharmaceuticals. The servers arrived defective and Insight rightfully rejected them. Insight paid emergency substitute hosting fees and reasonable inspection costs. Those inspection and substitute-hosting expenses count as incidental damages recoverable by the buyer.
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Imani Idowu purchased a used truck from Ivan Ivanov. The truck was seized by authorities because of the seller's title defect. Imani paid towing and storage fees to retrieve the vehicle. Those retrieval and storage fees qualify as incidental damages caused by the breach.
Isaac Irving sold perishable produce to India Inoue. India rejected the shipment after inspection revealed nonconformity. Isaac paid return shipping and temporary cold-storage charges. Those shipping and storage charges constitute incidental damages.
Ivy Investments bought cloud servers from Ilana Isaacs. The servers proved unstable, forcing Ivy to delay a product launch. Ivy paid reasonable inspection and substitute-hosting expenses after rightful rejection. Those inspection and cover expenses qualify as incidental damages.
Incidental damages cover out-of-pocket expenses such as inspection, storage, transportation, and cover costs that arise directly from responding to the breach. Consequential damages cover losses such as lost profits that result from special circumstances known to the breaching party at contracting.
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An aggrieved seller may recover incidental damages under UCC § 2-710. An aggrieved buyer may recover incidental damages under UCC § 2-715(1). Both provisions list specific categories of reasonable expenses caused by the breach.
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Yes. When a seller recovers the contract price under UCC § 2-709, the seller may also recover incidental damages such as storage and care costs incurred while holding the identified goods for the buyer.
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Yes. Like all contract damages, incidental damages must be proven with reasonable certainty. The injured party must show both that the expenses were incurred and that they were reasonable responses to the breach.
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Yes. UCC § 2-715(1) expressly includes any commercially reasonable charges, expenses, or commissions incurred in connection with effecting cover as recoverable incidental damages.
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…to possess and exploit the land — that is to say, his beneficial ownership of it — would be destroyed. It would not be a case of incidental damages arising from a legalized nuisance such as was involved in Richards v. Washington Terminal Co. , 233 U. S. 546. In that case, property owners whose lands adjoined a railroad line were…