There are five different ways that we can measure legal (monetary) damages: 1) c
ID: 428177 • Letter: T
Question
There are five different ways that we can measure legal (monetary) damages: 1) compensatory, 2) consequential, 3) nominal, 4) punitive, and 5) liquidated. Each of these attempts to estimate some aspect of injury caused by the breach of contract. While compensatory and consequential damages complement each other and are sometimes collectively called actual damages. Actual damages mutually exclude the award of nominal or liquidated damages. Nominal damages like liquidated damages preclude any other type of damage award. Finally, punitive damages will not be awarded for breach of contract because it would be contrary to public policy. How would awarding punitive damages for breach of contract harm society? There are five different ways that we can measure legal (monetary) damages: 1) compensatory, 2) consequential, 3) nominal, 4) punitive, and 5) liquidated. Each of these attempts to estimate some aspect of injury caused by the breach of contract. While compensatory and consequential damages complement each other and are sometimes collectively called actual damages. Actual damages mutually exclude the award of nominal or liquidated damages. Nominal damages like liquidated damages preclude any other type of damage award. Finally, punitive damages will not be awarded for breach of contract because it would be contrary to public policy. How would awarding punitive damages for breach of contract harm society? There are five different ways that we can measure legal (monetary) damages: 1) compensatory, 2) consequential, 3) nominal, 4) punitive, and 5) liquidated. Each of these attempts to estimate some aspect of injury caused by the breach of contract. While compensatory and consequential damages complement each other and are sometimes collectively called actual damages. Actual damages mutually exclude the award of nominal or liquidated damages. Nominal damages like liquidated damages preclude any other type of damage award. Finally, punitive damages will not be awarded for breach of contract because it would be contrary to public policy. How would awarding punitive damages for breach of contract harm society?Explanation / Answer
Punitive damages are those damages that exceed simple compensation and are awarded with an intention to punish the defendant. The primary objective of punitive damage is not to compensate the aggrieved party but to punish the party that has offended or wronged the aggrieved party.
Awarding punitive damages for breach of contract can potentially harm the society. This is because many breaches of contract can be due to behavior of the offending party which is neither deliberate nor reckless. Punitive damages should only be limited and applicable to tort cases and should only be used to punish those wrongdoings that are deliberate and reckless. However using punitive actions to punish someone who has breached a contract due to certain events or situations that were not in his control will be unjust and unfair.
Punitive damages are quasi criminal in nature and categorizing and clubbing all breach of contract (even though not intentional or not having elements of bad faith, malice or wanton) as quasi criminal in nature will be contrary to public policy and will harm the society.
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