What type of damages may include loss of future profits due to breach of contract?

Consequential damages refer to any losses that are not directly caused by a breach of contract but are a consequence of the breach. This category of damages often includes losses that arise from the specific circumstances surrounding the non-breaching party, such as loss of potential future profits, lost business opportunities, or other indirect losses that occur as a result of the breach.

For example, if a supplier fails to deliver goods on time, resulting in lost sales opportunities for the buyer, those lost profits would be considered consequential damages. The key distinction is that these damages stem from the unique impact of the breach on the non-breaching party's business or situation rather than from the breach itself.

The other types of damages listed are defined differently. Direct damages usually cover losses that directly stem from the breach itself. Incidental damages are those that occur as a reasonable expense incurred to mitigate the loss or as a result of the breach, while punitive damages are awarded not to compensate for losses but to punish the breaching party and deter similar behavior in the future. Thus, the characterization of loss of future profits due to a breach as consequential damages is accurate.