Key Takeaways

  • Special damages are compensatory damages awarded for quantifiable financial losses directly or indirectly caused by a breach of contract or tortious act.
  • They differ from general damages by requiring proof of specific monetary loss, such as lost profits, medical bills, or property repairs.
  • In contract law, special damages must be foreseeable, directly linked to the breach, and clearly calculable to be recoverable.
  • In tort cases, they cover measurable economic losses like lost wages, medical expenses, and property damage, while general damages address non-economic harm.
  • Courts require detailed documentation—such as receipts, invoices, and financial records—to substantiate a claim for special damages.

Special damages are awarded in a contract lawsuit to cover losses due to a breach of contract. Generally, they must be requested prior to the beginning of the trial because they concern losses that weren't the direct result of the contract breach. Special damages don't just relate to losses incurred under the contract. They can also include things such as loss of business reputation and loss of profits.

Special Damages Versus General Damages

As part of a contract suit, general damages are contractual losses, including losses resulting from the withholding of money or the difference between contract prices and market rates.

In contrast, special damages, also sometimes called consequential damages, might not have been directly triggered by the contractual breach. A plaintiff can claim them in addition to general damages. They may include things like:

  • Loss of operating revenue due to a delay in construction
  • Harm to a company's business reputation
  • Loss of time

In a case involving loss of profit, for example, a dealer in precious stones may have expected to buy an item from a seller for $10,000 before selling it for $11,000. If the seller broke the contract and sold the item to another businessman, the dealer could sue for special damages. The special damages claim would be $1,000, which would cover the profit he expected to make from the item.

Key Legal Differences and Examples

The critical difference between special and general damages lies in how they are measured and proven. Special damages are economic losses that can be precisely calculated using documentation such as invoices, receipts, or contracts. They aim to restore the plaintiff to the exact financial position they would have been in had the breach or wrongful act not occurred. Examples include lost profits from a canceled order, medical bills from a car accident, or costs of renting substitute equipment when a supplier fails to deliver.

In contrast, general damages are non-quantifiable losses such as emotional distress, pain and suffering, or reputational harm. These rely on subjective valuation and often require expert testimony to estimate. In many cases, plaintiffs pursue both types together to fully compensate for their losses.

Claiming Special Damages in a Contract Suit

It can often be difficult to secure special damages in a contract suit because issues of causation and foreseeability must be investigated. Special damages aren't generally part of the majority of contract cases. As a result, a party can sometimes lose their right to claim these damages if they fail to state that they want to claim special damages prior to the trial.

Proving Special Damages in Court

Courts require plaintiffs to meet a higher evidentiary standard for special damages than for general damages. To successfully recover them, you must provide:

  • Detailed documentation: Evidence like receipts, contracts, bank records, or financial statements showing the exact amount of loss.
  • Causal link: Proof that the defendant’s actions directly caused the financial loss.
  • Foreseeability: Demonstration that the loss was reasonably foreseeable by both parties when entering the contract (following the principle from Hadley v. Baxendale).

For example, if a supplier’s breach causes you to miss a lucrative resale opportunity, you must show the opportunity was known or predictable and quantify the profit lost. Failure to provide adequate proof often results in dismissal of the special damages claim.

Requirements for Securing Special Damages

In determining whether special damages should be awarded, a court will take the following issues into account:

  • Were the losses reasonably foreseeable when the contract was agreed?
  • Is there a causal connection between the losses and the contractual breach?
  • Are the losses calculable?

Some contracts relate to matters where losses are hard to quantify. These contracts often contain a condition requiring one of the parties to give up their right to sue for special damages. Certain jurisdictions also only allow special damages claims if the losses suffered were unavoidable.

Common Categories of Special Damages

Special damages may cover a wide range of financial losses, depending on the case type. Common categories include:

  • Lost income and earning capacity: Wages lost during recovery or diminished future earnings.
  • Medical and rehabilitation expenses: Hospital bills, medications, therapy, and ongoing care costs.
  • Business-related losses: Lost profits, canceled contracts, and extra operating costs.
  • Property damage costs: Repair or replacement of damaged property.
  • Other measurable losses: Travel expenses, rental costs, or any other documented out-of-pocket costs.

Including all relevant categories in a claim—and supporting each with documentation—is essential to maximize recovery.

Special Damages in Other Contexts

The legal term "special damages" has a different meaning in contract claims than it does in tort claims. In a tort claim, special damages refer to losses that can be calculated precisely, while general damages are losses that are hard to quantify. This is almost the exact opposite of how the terms are used in a lawsuit related to a breach of contract.

Things are made even more confusing by the fact that many contract claims also include tort issues. The decision to present an action as a tort or contract breach can impact the total damages that a plaintiff can secure.

Special Damages in Personal Injury Claims

In personal injury cases, special damages form the backbone of compensation because they cover tangible financial losses incurred due to the injury. These are often easier to prove than general damages because they rely on objective financial records. Examples include:

  • Medical bills for surgeries, treatments, or rehabilitation.
  • Lost wages from time away from work.
  • Future medical costs and long-term care.
  • Transportation expenses related to medical appointments.

Unlike general damages, which compensate for pain and suffering, special damages directly address the economic impact of the injury on the victim’s life and finances.

Special Damages and General Damages in Tort Claims

In a tort claim, special damages and general damages are both part of the broader category of compensatory damages, which aim to reimburse the plaintiff for losses or damage. In this context, special damages and general damages may also be referred to as economic and non-economic damages, respectively.

Special damages are calculated at market value prices at the time of the loss. In a tort claim, attorneys may try to secure special damages to cover items, such as:

  • Medical expenses
  • Replacement or repair of damaged property
  • Loss of wages and ability to earn income
  • Loss of items that can't be replaced

In the context of a tort claim, the term "general damages" takes on another meaning. It concerns losses that are difficult to determine, such as:

  • Physical disfigurement
  • Loss of companionship
  • Lower quality of life
  • Mental distress

To help put a cost on these factors, the plaintiff may call on expert witnesses to offer testimony. General Damage costs can vary depending on the plaintiff. As a result, general damages awards in tort claims can be different even if the circumstances of the cases are similar.

Strategies for Maximizing Special Damages Recovery

To strengthen a special damages claim, consider these strategies:

  1. Document everything: Maintain organized records of all expenses and financial losses from the moment the injury or breach occurs.
  2. Engage expert testimony: Economists, accountants, or medical professionals can help quantify future losses such as long-term earning capacity or medical care costs.
  3. Link losses clearly: Provide evidence that connects the defendant’s actions directly to each claimed expense.
  4. File claims promptly: Statutes of limitations vary, and delays may weaken or invalidate your claim.

Working with an experienced attorney can significantly increase your chances of securing full compensation. They can ensure your evidence meets legal standards and that no recoverable losses are overlooked.

Frequently Asked Questions

  1. What are special damages in a lawsuit?
    Special damages are compensation for specific, measurable financial losses caused by a breach of contract or tort, such as medical bills, lost profits, or property repairs.
  2. How do you prove special damages?
    You must provide clear documentation (e.g., receipts, invoices, financial statements) and show a direct, foreseeable link between the defendant’s actions and your losses.
  3. Are special damages the same as consequential damages?
    Yes, in many contexts they are used interchangeably, referring to financial losses resulting indirectly from a breach but still recoverable if foreseeable.
  4. Can you recover future expenses as special damages?
    Yes. If future costs—such as ongoing medical care or lost future earnings—are likely and quantifiable, they can be included in a special damages claim.
  5. What happens if I don’t document my losses?
    Without sufficient evidence, the court may reject your claim for special damages, even if the losses occurred. Proper documentation is essential.

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