To recover "consequential" damages (defendant would argue that the damages sought by plaintiff are consequential), plaintiff must prove that (i) the damages sought by plaintiff were within the contemplation of the parties at the time of contracting as one of the remedies for the breach, (ii) the injury was actually caused by the breach, and (iii) the amount of the damages can be shown with reasonable certainty.
The very first argument by defendant would be that the type of injury alleged by plaintiff is consequential.
NY courts historically have had this bright-line rule that direct damages arise only where the lost profits were to be realized out of the transactions between the contracting parties under the contract.
In Biotronik, the highest court in NY stated that lost profits are direct damages when lost profits are natural and probable consequence of the breach under the contract. So, you cannot assume that lost profits are consequential damages.
In a reseller agreement, under which the reseller purchases products from the manufacturer, pays for the product transfer fee upon sale, and takes profits from the sale, lost profits of the reseller due to the manufacturer's recall of inventory were determined by the NY court to be direct damages because the contract would not work unless the reseller was engaged in the resale of the products (recall resulted in no resale, which resulted in lost profits).
A contract clause excluding "consequential damages" would not necessarily bar lost profits claims at least in NY.
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