Direct Damages Law and Legal Definition

Direct damages in contract law are generally the difference between the value of the performance received and the value of the performance promised as measured by contract or market value. They are designed to put the injured party in the position they would occupy if the other party delivered the perfomance promised in the contract, rather than punish the non-performing party. However, direct damages do not include incidental or indirect damages, such as expenses incurred as a result of the non-performance or lost profits. Direct damages flow directly and immediately from the act of the party, rather than being from some of the consequences or results of such act.