Also known as: out-of-pocket loss · out of pocket loss · out of pocket losses · out-of-pocket expenses · special damages
Written by attorneys · grounded in primary & secondary sources — see below
Compensatory damages awarded for a harm other than one for which general damages are given.
After his lease ends, tenant Otis Olsen remains in the premises for two weeks while searching for new space. Landlord Overland Transport incurs extra cleaning and security costs to prepare the unit for an incoming tenant. The landlord recovers those actual expenses as special damages caused by the holdover.
Dr. Olivia Owens purchases an electronic records system after the vendor negligently misstates its capabilities. She incurs data-conversion fees and workflow disruption expenses when the system fails to integrate. Those actual expenditures qualify as recoverable out-of-pocket losses.
Select any source to read its text and confirm it supports the definition.
After a car accident, Orion Orlov submits receipts for emergency treatment and follow-up therapy. State Farm reimburses only the documented amounts actually paid as special damages rather than any projected future costs.
Ophelia O'Brien proves she lost three weeks of freelance income after a false article damaged her reputation. The court awards only the documented earnings she would have received as special damages absent the publication.
Oasis Resorts paid Arthur Young for an audit that contained negligent misstatements about financial controls. The company later incurs additional audit and remediation costs to correct the errors. Those documented expenditures constitute out-of-pocket losses.
Offshore Rental Co. moves equipment and personnel to a new site after a negligent valuation report. The documented moving and setup expenses are awarded as out-of-pocket losses caused by reliance on the report.
The plaintiff recovers the difference between the price paid and the actual value received plus other pecuniary losses proximately caused by reliance on the misstatement. Expectation or benefit-of-the-bargain damages are not available.
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Out-of-pocket losses restore the plaintiff to the position occupied before the transaction. Benefit-of-the-bargain damages place the plaintiff in the position that would have existed if the representation had been true and are available only in intentional fraud actions when proved with reasonable certainty.
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No. Lost profits represent expectation damages that the law excludes from negligent misrepresentation recovery. Only actual expenditures and value differences caused by reliance qualify.
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A clear disclaimer can negate reasonable reliance and thereby prevent the claimed losses from qualifying as legally caused by the misrepresentation. Courts examine whether the plaintiff knew of the limitation before acting on the report.
…wide experience in framing appropriate jury instructions in tort actions. Suffice it to say that actual injury is not limited to out-of-pocket loss. Indeed, the more customary types of actual harm inflicted by defamatory falsehood include impairment of reputation and standing in the community, personal humiliation, and mental anguish…