Andrew Tettenborn, Consequential Damages in Contract- The Poor Relation 42 Loy. L.A. L. Rev 177

In this Article, Andrew Tettenborn discusses the ways in which law treats direct and consequential damages differently. An interesting read.

The term "consequential damages" seems to be a misnomer as even direct damages are "consequential". Consequential damages are synonymous to indirect damages. Initially contracting parties used the term "direct and consequential" damages to refer to damages that arose as a natural consequence of the breach or which could be supposed to have been in contemplation of the parties at the time of signing of contract. contracting parties usually excluded "indirect and consequential damages". Drafting errors ("indirect or consequential damages") probably made the courts to construe "consequential" to mean indirect. Thus, the term "consequential damages" has come to refer to those categories of loss that were not in contemplation of the parties or that could not be supposed to have been in contemplation of the parties at the time of entering into the contract.

See, HOTEL SERVICES LTD. v. HILTON INTERNATIONAL HOTELS (UK) LTD.