CONTRACT LAW COURSE
Punitive Damages
Seminar presented by
Synda Somai and Chahd Soussia
Introduction
Contracts result in obligations which are usually binding to both parties, however
when one party breaches the contract causing damage to the other contractor, the
damaged party can resort to litigation.
The promisee, (A.K.A the nonbreaching party), has the right to damages (a money award), if
that is required to make her whole, whenever the other party has breached the contract,
(unless, of course, the contract itself or other circumstances suspend or discharge that right.)
Damages refers to money paid by one side to the other; it is a legal remedy.
Six remedies can be awarded by the court depending upon the circumstances of the
case. However, when the damage is the result of an egregious conduct or the loss
is excessive, punitive damages can be awarded.
Definition of Punitive Damages
Also known as "vindictive" or "exemplary" damages, "PD are money
damages awarded to a plaintiff in a private civil action, in addition to and
apart from compensatory damages, assessed against a defendant guilty
of flagrantly violating the plaintiff's rights.”
Historical
overview This doctrine was eventually
transmitted to the United States
The first traces of multiple damages and firstly resorted to in Gernay V.
in English law appear to be in the Norris (1784).
13th century, enacted by Parliament
in the Statute of Westminster By the mid 19th century the punitive
damages doctrine was well
established in the American law
First “Exemplary damages” explicit
minus 5 states which don't recognize
manifestation was in the Huckle V.
this kind of remedy.
Money case (1763) case.
Problematic :
What is the purpose behind the emergence of the punitive
damages ?
I The function of restitution
A The retribution for the wronged party
B The compensation
The plan
II The function of deterrence
A The educational aspect
B The law enforcement
The function of restitution
A) Providing retribution
Punitive damages provide retribution Restitution aims to restore the situation
to both wronged parties and society to its prior state : prevent the "unjust
as a whole. impoverishment of the victim (and
society) and the unjust enrichment of
Retribution in this context is a logical the thief” which can only occur through
outcome for the misconduct and a punishment.
form of legal venting for the outrage
of the victim. However, the degree of punishment
the interest behind this function is varies per case because basing such
that it protects and promotes the two punishment on equity evokes the need
most fundamental values supporting to proportionate the accorded
the law: freedom and equity. damage to the wrongdoer's wealth
and the inflicted harm to the plaintiff.
B) The compensation
examples include : expenses of bringing
for the wronged party suite (attorney fees), missing professional
opportunities or interpersonal
Although compensation is not the relationships because of the occurring
main role of the punitive damages, damage, etc.
they do nevertheless, serve
compensatory functions. However, many scholars consider punitive
damages as a "windflall" which add up to
the compensatory damages and become
Such awards serve to reimburse the
an "excess" award (as it doubles or trebles
plaintiff for damages which are not
in sum sometimes) would be more worthy
recoverable as compensatory
to benefit the state than the already
damages.
awarded plaintiff.
The function of deterrence
A) The educational aspect
Punitive damages prove the existence of a legally
protected right in the plaintiff’s favour and
therefore a legal duty for the defendant.
They reflect the importance that the law places
on the plaintiff’s invaded right as well.
Punitive damages assessments establish the
consequences of improper behaviour to remind
the defendant/society that some particular
legal right-duty values not only exists but are
protected by law.
B) The law enforcement
The importance : Since it’s a legal rule and thus, protected by law; this motivates
victims to press their claims and enforce the rules of law which helps catching
and punishing wrongdoers who are not deterred. By helping to put into action
the detection and proof, it will be easier to execute the punishment.
The application : Since many legal rules are not being obeyed there are many
violations occurring each day especially when the unlawful activities are
profitable for the violator. (Example of how it operates: Dietary pills
manufacturer). To activate the procedural function of the punitive damages
doctrine and after the injury of the victim, they must prove the substantive rules
of liability (damage).
Conclusion
Punitive damages have an ancient history, and a certain importance as
they provide a flexible tool for prohibiting certain misconduct activities to
protect society as a whole, but that didn’t prevent the scholars from
criticizing the doctrine especially the application since it can be a tool for
the plaintiff to have an even more important amount of money, in addition
to his right of compensatory damages.
