In a sophisticated commercial world, the damages that can arise as a result of consequential losses can be enormous and frequently outweigh any possible direct losses. Contractors, service providers or other suppliers often argue that they do not have the financial capacity to take on the loss of damages for loss of profit, continuing overhead and related economic loss arising out of work performed on a project. From an owner's perspective, one needs to ask whether it is appropriate and financially beneficial to allocate the risk of such damages to the contractor. Where the contractor is put into a "bet your company" type of position, is it realistic to expect that, in the event of a catastrophic loss, the contractor will be able to pay for the consequential damages in any event?

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