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Direct and Consequential Losses - A single international approach and understanding?

  • United Kingdom
  • Construction and engineering - Articles


Consequential losses are often the subject of exclusion clauses in construction and engineering contracts. Understanding what consequential loss means and what categories of losses fall within that definition is important in understanding risk profile on a construction/engineering contract. When contracting with international parties, understanding different approaches to consequential (or indirect) losses is key in both the negotiation phase and in any dispute which may arise. This article seeks to explain the different common law approaches to consequential loss, how to manage risk on EPC contracts when dealing with consequential/indirect loss and best practice for future negotiations.

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