Consequential loss
Consequential loss is loss beyond the direct and natural result of a breach - lost profits, loss of opportunity, financing costs - and whether you are exposed to it depends almost entirely on the contract's exclusion clause, or the absence of one.
Australian courts interpret "consequential loss" by the contract's own words rather than a fixed legal meaning, which makes the drafting decisive. Sophisticated contracts define the excluded categories precisely; harsh ones exclude nothing, leaving indemnities and damages claims to reach as far as causation allows.
Why it matters to subbies
A mutual exclusion of consequential loss is one of the most valuable, least controversial asks available - many builders accept it because it protects them too.
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General information for Australian subcontractors, not legal advice - contract drafting and state legislation vary and change; your document and your state's Act govern. Written by Mat Kennedy at The Construction Contracts Co.