out of pocket
Definition
Out of pocket refers to real money you actually spent from your own wallet because of someone else's mistake or breach of contract. Courts use this term to describe losses you can prove with receipts and bank statements, as opposed to estimated or potential future losses.
Example
If a contractor abandons your renovation halfway through and you pay another company extra to finish the job, those extra payments are your out of pocket losses that you could sue to recover.
Watch Out
Out of pocket damages are usually easier to win in court than lost profits, so always save every receipt and document every expense when something goes wrong in a business dispute.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.