Consequential Damages in United States and Iranian Law

One type of damages resulting from the breach of contract in American law is consequential damages, also known as special damages and indirect damages, as opposed to compensatory or direct damages. The term has been used in the American legal literature, in judicial judgments, and in important American documents and laws, such as the Uniform Commercial Code, but the meaning of this damages and its compensability is very doubtful. It is argued that the authors' attempt to explain this concept has failed, and thus, some great American jurists have suggested that the use of the term should be stopped. However, the choice of American law as the subject of this study is due to the widespread use of the term consequential damages in US law, especially in legal texts, and hence, to find a relatively reliable basis for studying this concept. Recognition of this concept is especially important in cases where US law governs the relationship between the contracting parties and also where an exclusion clause for consequential damages is included in the contract.