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monetary compensation that the law awards to one who has been injured by the action of another; monetary recompense for a legal wrong such as a breach of contract or a tortious act. There are various measures used for calculating damages, including diminution of value and cost of completion. Compare specific performance.
ACTUAL [COMPENSATORY; GENERAL] DAMAGES: losses directly referrable to the breach or tortious act; losses that can readily be proven to have been sustained, and for which the injured party should be compensated as a matter of right.
COMPENSATORY DAMAGES: see ACTUAL DAMAGES above
CONSEQUENTIAL [SPECIAL] DAMAGES: indirect loss or injury. In contract law, consequential damages are recoverable if it was reasonably foreseeable at the time of contract that the injury would probably result if the contract were broken. The availability of award of such damages depends upon the defaulting party's actual or constructive knowledge of conditions that make likely some special injury upon default. Special damages should be distinguished from ACTUAL [GENERAL] DAMAGES, which are presumed directly caused by the injury. Because special damages do not necessarily flow from the injury, they must be specially pleaded and proven. The distinction between special and general damages is not absolute but, rather, is relative and depends upon the circumstances of each case. For instance, in an action for failure to provide widgets as agreed in a contract, the general damages would be the price paid under the contract. Any claim for damages to business reputation for reliability would be special damages. In an action for the tort of interference with a business relationship, however, damage to the business reputation would be the general damages. Under the UCC, in order for a buyer to recover consequential damages resulting from a seller's breach, the damages must not have been avoidable by cover. EXAMPLE: Crystal Lighting contracts with a construction company to install unique light fixtures throughout a new building. On the basis of that contract, Crystal also contracts with one of its suppliers to have several hundred fixtures delivered to Crystal. Since this is not a normal order for Crystal, Crystal explains what all the fixtures are for. The supplier then breaches his contract. Ordinary light fixtures do not fit in the building design. Any damages in the contract between Crystal and the construction company that result from the breach are the direct foreseeable result of the supplier's breach. As such, those damages are called consequential damages.'
DOUBLE [TREBLE] DAMAGES: twice [or three tiems] the amount of damages that a court or jury would normally award, recoverable for certain kinds of injuries pursuant to a statute authorizing the double [or treble] recovery. These damages are intended in certain instances as punishment for improper behavior. Treble damages is a statutory remedy most often awarded in antitrust violations.
EXEMPLARY [PUNITIVE] DAMAGES: compensation in excess of actual damages that is a form of punishment to the wrongdoer and reparation to the injured. Exemplary damages are awarded only in rare instances of malicious and willful misconduct. EXAMPLE: Several corporations are found guilty of fixing the price of milk over a nine-year period. In addition to assessing a fine on the corporations, a judge awards an additional amount as punitive damages. since all purchases of milk were affected by the price-fixing, the judge might order that the amount of the punitive damages be repaid to consumers by a coupon offering. EXPECTATION DAMAGES: a measure of the money damages available to plaintiff in an action for breach of contract, based on the value of the benefit he would have received from the contract if the defendant had not breached, but had completed performance as agreed. The amount is generally the monetary value of full performance of the contract to the plaintiff minus costs plaintiff avoided by not performing his own part of the contract.
GENERAL DAMAGES: see ACTUAL DAMAGES above
INCIDENTAL DAMAGES: losses reasonably incident to conduct giving rise to a claim for actual damages. A buyer's incidental damages would include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected while the seller's incidental damages would include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer's breach, in connection with return or resale of the goods.
LIQUIDATED DAMAGES: see liquidated damages.
NOMINAL DAMAGES: a trivial sum awarded as recognition that a legal injury was sustained, though slight. Nominal damages will be awarded for a breach of contract or for an intentional tort to vindicate the plaintiffs claim where no recoverable loss can be established.
PUNITIVE DAMAGES: see EXEMPLARY [PUNITIVE] DAMAGES above.
SPECIAL DAMAGES see CONSEQUENTIAL [SPECIAL] DAMAGES above.
TREBLE DAMAGES: see DOUBLE [TREBLE] DAMAGES above.
Source: Barron's Dictionary of Legal Terms, Steven H. Gifis, 5th Edition; © 2016
"In examining punitive damage awards to ensure that they are based upon an application of law rather than a decisionmaker's caprice, the United States Supreme Court instructs reviewing courts to consider three guideposts: (1) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages awarded; and (3) the degree of reprehensibility of the defendant's misconduct. See id.
It should be presumed a plaintiff has been made whole for his injuries by compensatory damages, so punitive damages should only be awarded if the defendant's culpability, after having paid compensatory damages, is so reprehensible as to warrant the imposition of further sanctions to achieve the punishment or deterrence." Id. at 1521 (internal citation omitted)."
- USA v. Bailey, 288 F.Supp.2d 1261 (USFLMD 2003)