Incidental Damages Law and Legal Definition

Incidental damages are sometimes awarded in a lawsuit for a breach of contract as compensation for commercially reasonable expenses incurred as a result of the other party's breach, such as costs of inspecting and returning goods that do not conform to contract specifications. Incidental damages are added to compensatory damages. For transactions governed by the Uniform Commercial Code (UCC), the UCC provides:

"Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer's breach, in connection with return or resale of the goods or otherwise resulting from the breach."