Legal Definitions - breakage

Definition: Breakage refers to two different things:

1. An allowance given by a manufacturer to a buyer for goods that were damaged during transit or storage.
2. Insignificant amounts of money retained by racetrack promoters from bets. This is done to avoid the inconvenience of counting and paying out inconsequential winnings.

For example, if a shipment of fragile items like glassware or electronics is being transported from one place to another, there is always a risk of some items getting damaged during transit. In such cases, the manufacturer may offer a breakage allowance to the buyer, which is a discount or compensation for the damaged goods.

Similarly, in horse racing, there are often small amounts of money left over from bets that are not paid out to the winners. This is because it is not worth the time and effort to count and pay out these small amounts. Instead, the racetrack promoters retain this money as breakage.

These examples illustrate how breakage is used in different contexts to refer to small amounts of money that are either compensated for or retained due to their insignificance.