Based on the definition of Legal Information Institute USA, consequential damages “are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation, a breach of contract”. In other words, a consequential damage is an indirect damage which is not the immediate result of non-performance.
Specific examples of non-performance in translation contracts are mistranslations or delays in delivery. In an NDA, it can be a breach of confidentiality.
Before signing contracts or NDAs, translators should carefully pay attention to the Article(s) regarding indemnity, liability or penalty. The translator, as a contractor, might be held responsible and liable for all the damages (i.e. direct and indirect), loss, costs or liabilities due to “any” breach of confidentiality for instance. Suppose a translator has the best antivirus protection for their computer. Yet, the computer is hacked. The translator should, then, indemnify the client and the translation agency (if the job is provided by the agency) with the equivalent amount as they have incurred or suffered in direct and indirect damages.
Associations of translators and interpreters (including Het Nederlands Genootschap van Tolken en Vertalers) recommend that translators and interpreters should be clear in their terms and conditions and be only responsible for damage and/or loss that is the direct and demonstrable result of an attributable breach on the translator’s part.
✓ The translator is at no time liable for any other form of damage and/or loss, such as consequential loss, loss due to delay, or loss of profits.
✓ Where applicable, the translator’s liability is at all times limited to the invoice value, exclusive of value-added tax (sales tax), of the work concerned.
✓ Where applicable, the translator’s liability is at all times limited to the amount paid out under their insurance policy.