Intangible losses

Definition

Intangible losses refer to non-physical damages that are not easily quantifiable in monetary terms, such as emotional distress, loss of enjoyment of life, or damage to reputation. These losses can arise from a breach of contract and are significant when assessing the full impact of a contractual violation, particularly in determining the appropriate compensation.

5 Must Know Facts For Your Next Test

1. Intangible losses can significantly complicate damage calculations in legal disputes because they are subjective and harder to prove than tangible losses.
2. Examples of intangible losses include loss of companionship, emotional anguish, and loss of business reputation.
3. Not all contracts allow for recovery of intangible losses; some jurisdictions limit claims to strictly economic damages.
4. Courts often look for evidence such as testimonies or expert opinions to establish the existence and extent of intangible losses.
5. Intangible losses may not be awarded in every case, as they depend on the specifics of the contract and jurisdictional standards.

Review Questions

• How do intangible losses differ from tangible losses in the context of contractual breaches?
  • Intangible losses differ from tangible losses primarily in their nature and measurement. Tangible losses involve clear financial implications like lost profits or physical property damage, which can be quantified easily. In contrast, intangible losses, such as emotional distress or loss of reputation, are more subjective and often require additional evidence to assess their impact on the injured party. Understanding these differences is crucial for accurately determining damages in legal cases.
• Discuss the challenges courts face when evaluating intangible losses in breach of contract cases.
  • Courts face several challenges when evaluating intangible losses due to their subjective nature and lack of concrete evidence. Unlike tangible damages that can be calculated through invoices or receipts, intangible losses often rely on personal testimony and expert opinions to establish their existence and extent. This subjectivity can lead to inconsistencies in awards across different cases, creating legal uncertainty about how intangible damages are handled. Additionally, some jurisdictions may impose stricter limits on claiming these types of damages.
• Evaluate the implications of recovering intangible losses on contract law and how this might affect future contractual agreements.
  • Recovering intangible losses has significant implications for contract law as it expands the scope of what parties can claim in the event of a breach. This could lead to greater caution among contracting parties regarding the terms they agree to, as they may wish to limit their exposure to potential claims for emotional distress or reputational harm. As a result, future contracts might include clearer definitions and limitations around recoverable damages, impacting how agreements are structured and negotiated to mitigate risks associated with intangible losses.

Related terms

compensatory damages: Monetary awards granted to a plaintiff to compensate for actual losses incurred as a result of another party's breach of contract.

punitive damages: Damages awarded in addition to compensatory damages, intended to punish the wrongdoer and deter similar behavior in the future.

emotional distress: A form of intangible loss that encompasses psychological suffering resulting from a breach of contract or other wrongful act.