Consequential damages are indirect losses that flow from a breach but are not the direct cost of the breach itself. Examples: lost rent because the building opened late, lost profits from business interruption, loss of financing, loss of tax credits, loss of reputation. They are distinct from direct damages, which are the actual cost to fix or complete the breached work.
Most AIA standard contracts include a mutual waiver of consequential damages, meaning neither party can sue the other for these indirect losses. The waiver is one of the most contractor-protective provisions in standard construction contracts because consequential damages on a delayed building opening can dwarf the contract value. Custom contracts (and many owner-drafted forms) sometimes carve back the waiver, exposing the contractor to liability for the owner's lost rent or business interruption. Always read the consequential damages language carefully.