What are "consequential damages" in the context of UCC?

Consequential damages refer to losses that occur as a foreseeable result of a breach of contract, extending beyond the direct loss incurred from the breach itself. Under the Uniform Commercial Code (UCC), these damages are not merely a reflection of the immediate impact of the breach but encompass additional losses that could be anticipated by the parties at the time the contract was formed.

For example, if a seller fails to deliver goods on time, and the buyer loses a significant business opportunity because of this delay, those lost profits may be classified as consequential damages, provided they were foreseeable at the time of contracting. This principle encourages parties to consider the risks associated with a breach and to communicate any special circumstances that could lead to consequential losses.

The other options relate to different types of damages or aspects of breach. Direct damages are focused solely on the immediate financial loss, while damages from delays might qualify under a specific context rather than capturing the broader implications of foreseeability. Punitive damages, on the other hand, are intended to punish wrongful behavior and are generally not applicable within the UCC framework for breach of contract scenarios.