Final answer:
Under contract law, consequential damages can often be disclaimed entirely in a contract, provided such disclaimers comply with state laws and are not unconscionable. This enables parties to limit potential liability for unforeseen damages resulting from a breach of contract, with agreements enforceable through legal systems, facilitating commerce and economic growth.
Step-by-step explanation:
The question asks about the treatment of consequential damages in contract law. Consequential damages are a type of damages that may result from a party's failure to fulfill their obligations under a contract. These damages are not directly caused by the breach but occur as a foreseeable result of the breach.
In contract law, consequential damages may often be disclaimed entirely by way of a clause in the contract, as long as the disclaimer is not considered unconscionable. The disclaimer or limitation of warranties or consequential damages needs to comply with the applicable state law, taking into account the constitutional guarantees and property rights that allow individuals to enter agreements, such as the surgeon-patient example provided.
Moreover, consequential damages can be awarded in an arbitration setting unless the arbitration agreement explicitly limits such awards. Each case will be judged on its merits and the specific terms of the contract in question.