Contracts-Recoverable Damages
The damages that may be provided in a contract action generally fall into two categories—direct damages and indirect damages. Direct damages are those that are actually spelled out in the contract. In the painting example, the $100 that was to be paid would be the direct damages. Suppose Joe told you when he agreed to paint your house that he needed to be paid by a certain date otherwise his landlord was going to evict him from his business location, putting him out of business. If that had been disclosed initially and it was within the contemplation of the parties that Joe would suffer significant consequences if payment was not made in a timely fashion, then those consequential damages—the damages flowing from the failure to pay—may likewise be recoverable in a contract claim as indirect damages.
