Although nominal damages don’t have a significant monetary effect on contractors, they can show themselves in other ways that many contractors aren’t aware of. In part one of this four-part series, the Nashville contractor lawyers at Cotney Construction Law introduced nominal damages. Now, we will discuss the most common types of damages awarded for a breach of contract before discussing nominal damages in depth in parts three and four.
Common Types of Damages
When a plaintiff is awarded damages for a breach of contract or other dispute, they are typically granted one of the following:
- Compensatory Damages: money awarded to cover the plaintiff’s monetary and non-monetary losses.
- Liquidated Damages: an amount of money, specified in the contract and agreed to by both parties, that is awarded for a breach of contract. Liquidated damages are commonly collected by the investor when the contracted firm falls behind schedule.
- Punitive Damages: money awarded to the plaintiff when the other party breaches the contract in a manner that a judge deems deserving of a monetary punishment. Typically, punitive damages are awarded when the defendant has acted maliciously or willfully committed some form of wrongdoing against the other party.
- Restitution: damages awarded to the non-breaching party for out-of-pocket expenditures that arise when the other party has breached the contract.
Pursuing Nominal Damages
Whether you’re on the giving or receiving end of a compensatory claim, you have to be able to prove that you have either experienced a legal injustice or are due compensation. Sometimes, you can’t prove this, but you can still acquire compensation if you pursue the other party for nominal damages.
Sometimes, there’s no verifiable compensatory damages or the amount owed is too small to pursue through normal legal proceedings, so plaintiffs attempt to sue for nominal damages. The reasons why plaintiffs pursue nominal damages are extremely varied, but typically they want to prove that they were right, give themselves the opportunity to seek punitive damages, or stand up to a breach of our constitutional rights. Many people incorrectly assume that nominal damages are unimportant, but throughout history, nominal damages have been tied to famous cases such as the 1985 case between the United States Football League and the National Football League.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.