Consequential Expenses Clause Samples

The Consequential Expenses clause defines which indirect or secondary costs, arising as a result of a party’s actions or failures, are covered or excluded under the agreement. Typically, this clause clarifies whether expenses such as lost profits, loss of business opportunities, or additional costs incurred due to delays are recoverable by one party from the other. Its core function is to allocate risk by limiting or specifying liability for damages that are not the direct result of a breach, thereby providing predictability and protecting parties from potentially extensive financial exposure.