out-of-pocket costs
Definition
Out-of-pocket costs are the actual money you personally spent because someone else broke a contract or harmed you in some way. These are real dollars that left your wallet or bank account, as opposed to money you hoped to earn or profits you might have made. Courts often award these costs to make the injured person financially whole again.
Example
If a contractor abandoned your renovation halfway through and you had to hire someone else at a higher rate, the extra money you paid the second contractor counts as your out-of-pocket costs.
Watch Out
Keep every receipt and record every expense related to a dispute, because you can only recover out-of-pocket costs that you can actually prove you spent.
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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.