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Punitive Damages: Definition & Examples

Instructor: Jessica Schubert

Jessica is a practicing attorney and has taught law and has a J.D. and LL.M.

After you complete this lesson, you should understand what constitutes punitive damages. Moreover, you will review some examples of scenarios that may result in punitive damage awards.

Definition

Imagine that you were injured in a car accident where the car malfunctioned. It turns out that the car was part of a recall because the gas pedal would stick. During the case, the manufacturer of the car admits that the company knew of the problem, but decided to still make the car and sell it to the public. At the end of a trial, the car manufacturer is found responsible to you for your damages. The court decides that the car manufacturer should be punished for its actions. Therefore, the court imposes punitive damages, which are damages that are designed to punish the wrongdoer.

Punitive damages, also known as exemplary damages, are a type of damage category that a judge or a jury can place on a party that is liable. Someone who is liable has been found responsible to the other party for wrongdoing. There are instances where the court or a jury may find that the liable party has acted in such a wrongful way that the party deserves a punishment. This is when punitive damages will be awarded.

Punitive damages are awarded in addition to other kinds of damages. For example, a judge or jury can award actual damages, which are the exact amount of damages one actually sustained from something. Moreover, compensatory damages can be awarded to compensate a party for an injury.

The objective of a punitive damages award is not only to deter similar behavior from the liable party in the future, but also to punish the party for past wrongdoing. Moreover, punitive damages are usually not awarded in contractual cases.

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