Compensatory Damages

Question 1

Compensatory Damages

Answer 1

For Torts & Contracts

Goal is to fully compensate Plaintiff – make the P whole, not overcompensate

2 Types
Direct
Consequential (Special)

Question 2

Direct Damages

Answer 2

Plaintiff’s lost benefit of the bargain - as of date of breach

In tort, example: pain and suffering

Question 3

Consequential Damages

Answer 3

Compensate Plaintiff for secondary consequence of breach, not part of benefit

(think lost profits)

In tort, example: lost income

Question 4

Limits to Compensatory Damages

Answer 4

Uncertainty (damages must be proven with reasonable certainty)

Remoteness (only consequential) - must be reasonably foreseeable

Contracts: May be approximated (with evidence), but not speculated

Tort: tortfeasor liable for all injuries resulting from tort (damages are natural consequences of the wrongful act)

Question 5

Incidental Damages

Answer 5

Type of compensatory damages to make a plaintiff whole – typically awarded only in breach-of-contract cases

Does not represent bargain or secondary benefit

Arise when a buyer or seller breaches contract for goods and are incurred in connection with the storage/insurance/financing/etc until it can be resold.

Usually are easily provable
Need not be foreseeable, just reasonable under circumstances

Plaintiff will likely be required to mitigate damages
- If they do not mitigate, amount reduced/offset

Question 6

Collateral Source Rule

Answer 6

In a tort case where the plaintiff receives compensation for the damages caused by the defendant from his insurance company or a third-party source, his damages won’t be offset

Question 7

Measuring Damages for Breach of Contract

Answer 7

Depends on 3 interests - usually one of 3, the highest.

Expectation - Amount of money that will put the Plaintiff in as good as a position had the defendant preformed. (Includes consequential, if proved)

Reliance - Interest in being reimbursed for losses caused by reasonable detrimental reliance on the defendant’s breached promise (normally less than expectation - usually when it’s hard to recover expectation)

Restitutionary - Interest in disgorging the defendant’s unjust enrichment resulting from the breach

NO EMOTIONAL DISTRESS - except certain specific situations like burial of corpse

Question 8

Measuring Compensatory Damages for Torts

Answer 8

Pecuniary (objectively quantifiable) AND non-pecuniary (harms that cannot be monetized - objective)

Question 9

3 Main Torts for Compensatory Damages to Personal Property

Answer 9

Conversion - Fair market value at time of conversion

If D returns undamaged ->
- loss of use damages (rental value of property)
- restitution (defendant’s profit using property)

If damaged ->
- Depends on destroyed (fair market value before destruction) or repaired (reasonable cost of repair + loss of use damages + difference in value)

Trespass to Chattels - D must compensate P for any physical harm caused by the trespass

• Trespass - The interference with a plaintiff’s possession of real property
• Nuisance - The interference with a plaintiff’s use and enjoyment of the property

Negligent Injury of Personal Property

Question 10

Constitutional Torts

Answer 10

A government official’s unconstitutional act that comprises a common-law tort

Examples: Warrantless search (trespass), prison guard unjustified injury to prisoner (battery)

Based on the alleged constitutional violation
Not necessary, but may also plead non-constitutional tort (medical, pain and suffering)

Not presumed or inherent values.

Question 11

Nominal Damages

Answer 11

$1 award for something like trespass to stop from happening again / show harm