Legal Definitions - sunk cost

Definition: A cost that has already been incurred and cannot be recovered.

Examples:

• Money spent on a non-refundable concert ticket that you cannot attend.
• Investment in a failing business that cannot be recouped.
• Time and resources spent on a project that is ultimately abandoned.

These examples illustrate the concept of sunk cost because the money, investment, and time spent cannot be recovered, regardless of the outcome. It is important to recognize sunk costs and not let them influence future decisions, as they are no longer relevant to the current situation.