Also known as: loss-of-use damages · loss of use
Written by attorneys · grounded in primary & secondary sources — see below
Damages awarded to compensate a plaintiff for the inability to use property during the period it remains unavailable because of harm caused by the defendant's conduct.
Levi Lowe's delivery truck is struck by a negligent motorist and requires three weeks of repairs. During that time Levi cannot fulfill customer contracts that depend on the vehicle. The court awards him damages measured by the reasonable rental value of a substitute truck for the repair interval.
Lorenzo Lugo's specialized printing press is totally destroyed in a warehouse fire caused by the defendant's negligence. Lorenzo immediately orders a replacement that arrives six weeks later. The court permits recovery of loss-of-use damages for the reasonable replacement period even though the press itself is gone.
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Liam Larson's grazing pasture is flooded by a neighbor's broken irrigation pipe for four weeks. The cattle must be moved to rented land at extra cost. The court awards damages that include the loss of use of the pasture itself measured by its fair rental value during the flooding.
A chemical release forces the temporary shutdown of an airport terminal used by People Express Airlines. The airline incurs added costs and lost flight revenue while its gates remain closed. The court allows recovery of those economic losses because the airline's operations were directly and foreseeably impaired by the defendant's conduct.
A ship under time charter to Flint is delayed in dry dock because of the repair company's negligence. Flint loses the use of the vessel for profitable voyages during the delay. The court denies recovery because Flint holds no property interest in the ship and therefore cannot claim loss-of-use damages from the repairer.
Most modern courts permit recovery for the reasonable time needed to replace destroyed property. The older rule that barred such damages has been abandoned in the majority of jurisdictions.
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Courts commonly use the reasonable rental value of a substitute chattel or the fair rental value of land for the period of deprivation. Plaintiffs must show they would have used the property or incurred substitute costs.
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No. When only part of the premises remains usable, damages are measured by the reduction in fair rental value rather than by total loss. The tenant may still recover for the unusable portion.
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Yes. After proper notice a tenant may place in escrow only the abated portion of rent that corresponds to the loss of use. Escrowing the full rent is improper when the tenant retains substantial beneficial use of the premises.
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…the court treated the tenant’s and owner’s claims separately; the tenant’s claims were purely economic, stemming from the loss of use of its property right, as in the instant case. Further, the city had had notice of the leak since 1957 and should have known about it even earlier. Duty, breach and proximate cause were…