Contract Damages 34 A manufacturer delivers a new body composition analyzer to a

Question

Contract Damages 34 A manufacturer delivers a new body composition analyzer to a medical weight loss office on the firs day that the office opens or business. However, the analyzer will not work. It takes two weeks for the device to be serviced and installed. The repair bill comes to $1,000. During the two weeks, many of the medical office's patients leave for another practice. The physician argues that his lost proft on those patients is $10,000. The jury awards the full $1,000 for the repairs, and $10000 for the patients. Identify the two types of awards. Is it fair that the physician received ten times the value of the repair bill for his lost patients?

Explanation / Answer

It is the problem related to contract damage. As per law one can divide damages in two categorizes as compensatory or actual damage and punitive damage.

Compensatory damage is paid to compensate the loss, injury as a result of other’s breach of contract if claimant proves that the defendant’s wrongful act causes the tangible loss or harm.

Compensatory damage can be further categorized into special damage. Special damage includes direct loss and consequential loss. Damage for breach of contract is generally awarded to place the claimant in the situation in which he would have been.

Special damages can further be divided into two categories as incidental damage and consequential damage. Incidental damage may be defined as the quantum of direct loss to bring back the property in right position and consequential damages may be defined as quantum of loss of earning due to damage to the property.

So given problem is the example of incidental and consequential damages. Award for Expenses of repairing of $1000 to bring back the machinery to its original and working state can be termed as incidental damage award, and award of $ 10000 for the loss in earnings due to non working of machinery to the office can be termed as consequential loss damage award.

As question asks that is it fair that physician receiving 10 times of repairing cost is not right approach because the physician is receiving $10000 claim for the loss of profit due to non working of machinery not for repairing the machinery. For repairing he is separately being compensated for $1000. So $10000 damage is for consequential loss and $1000 for damage of machinery.

So above description discuss about the type and validity of damages.

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