Out-of-pocket expenses are those paid from an individual's own funds. Parties may be entitled to damages for out-of-pocket expenses incurred as a result of a contract or tort disputes. However, out-of-pocket expenses generally only extend to reliance damages, and do not encompass expectation damages. See DaimlerChrysler Motor Co., LLC. V. Manuel. However, out-of-pocket expenses are not the same as restitution, and some states, for example California, may limit which expenses qualify as out-of-pocket expenses even further. See e.g. People v. Brown. For example, in some cases, for an individual to be compensated for out-of-pocket expenses that they incurred, they must first actually incur a cost, that is, an amount charged or paid. Reilly v. Marin Housing Authority.
Out-of-pocket expenses may include, among others, the following: a victim’s expenses in assisting a police investigation into the crime of which they were the victim (People v. Ortiz); hospital and medical expenses (People v. Brown); or, travel, meal, or other expenses incurred by an employee for which an employer has agreed to reimburse employee (Porter v. City of Riverside).
[Last updated in August of 2020 by the Wex Definitions Team]