Which of the following types of damages can help recover incidental costs resulting from a contract breach?

Study for the Business Senior Exam. Use flashcards and multiple-choice questions with hints and explanations. Prepare confidently!

Incidental damages refer to the costs that arise directly from a breach of contract and are incurred in an attempt to mitigate the loss caused by that breach. These costs often include expenses incurred in efforts to find replacements, such as hiring temporary workers or securing alternative resources.

For instance, if a supplier fails to deliver materials on time, the buyer might incur additional costs to procure those materials elsewhere in a hurry. These types of costs are directly tied to the breach and represent the incidental effort made by the non-breaching party to minimize their losses.

While compensatory damages generally aim to cover the actual loss suffered by the injured party, they might not specifically account for these additional incidental costs incurred. Consequential damages, on the other hand, involve indirect costs that result from the breach, which can go beyond the immediate expenses and may include lost profits or other future business opportunities. Punitive damages are aimed primarily at punishing the breaching party rather than compensating the innocent party, and they do not apply to the recovery of incidental costs.

Thus, the focus on incidental damages is what qualifies this option as the correct answer for reflecting the specific recovery of costs stemming directly from actions taken as a result of a contract breach.

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