Regarding consequential damages, which of the following is FALSE?

• A. Consequential damages are damages that are unique or special to the plaintiff.
• B. Consequential damages may be recovered in addition to general damages.
• C. Unforeseeable consequential damages are not recoverable unless the breaching party had some reason to know about the possibility of these damages.
• D. Incidental damages are a subset of consequential damages.

Answer: (D)

Consequence damages are the extra losses that flow from the specific circumstances of the non‑breaching party and must be foreseeable to the breaching party at the contract formation. They sit beyond the direct, ordinary losses and can be recovered in addition to general damages if they were foreseeable and proven.

That fits the first statement, since these damages are indeed unique or special to the plaintiff based on the contract’s context. It also fits the second statement: you can recover consequential damages in addition to general damages, provided foreseeability and proof requirements are met. The third statement aligns with the foreseeability rule: unforeseeable consequential damages aren’t recoverable unless the breaching party had some reason to know about the possibility.

The problematic one is the idea that incidental damages are a subset of consequential damages. Incidental damages are costs that the injured party incurs to deal with the breach (such as costs to secure substitute performance, storage, inspections, or similar expenses). They are a separate category of damages, not a subset of consequential damages.