Punitive Damages for Breach of Contract UK – What You Need to Know
When a contract is breached, the consequences can be severe. Breach of contract occurs when either party fails to fulfill their obligations under the agreement. In the UK, individuals and businesses can seek damages for the harm caused by the breach. But what happens when the breach is particularly egregious?
In cases of extreme breach of contract, punitive damages may be awarded in addition to compensatory damages. Punitive damages are meant to punish the breaching party and deter others from similar conduct in the future.
What Are Punitive Damages?
Punitive damages are monetary awards given to a plaintiff in a civil lawsuit as a means of punishing the defendant for their outrageous behavior. The goal of these damages is to deter the defendant from engaging in similar conduct in the future.
Unlike compensatory damages, which are meant to compensate the plaintiff for their losses, punitive damages are intended to punish the defendant and send a message to others that similar behavior will not be tolerated.
When Are Punitive Damages Available in Breach of Contract Cases?
Punitive damages are not available in all breach of contract cases. To be awarded punitive damages, the breach must be particularly serious or fraudulent. This means that a simple breach of contract is unlikely to result in punitive damages.
Examples of when punitive damages may be available in breach of contract cases include:
– Intentional or malicious breach of contract
– Fraudulent misrepresentation or concealment of information
– Breach of contract in bad faith
– Willful or reckless breach of contract
– Breach of contract with knowledge of its potential harmful consequences
How Are Punitive Damages Calculated?
Unlike compensatory damages, which are calculated based on the actual losses suffered by the plaintiff, punitive damages are not tied to any specific harm. Instead, they are meant to be punitive and are left to the discretion of the court.
Courts will take into account the severity of the breach and the harm caused to the plaintiff, as well as the defendant`s conduct leading up to the breach and any efforts made to correct the situation.
It is worth noting that punitive damages are generally only awarded in cases where compensatory damages are also awarded. This means that for a plaintiff to receive punitive damages, they must first prove that they suffered damages as a result of the breach of contract.
Punitive damages for breach of contract cases in the UK are meant to punish the defendant for their outrageous behavior and deter others from similar conduct. These damages are not awarded in all breach of contract cases and are reserved for particularly serious or fraudulent breaches. If you believe that you may be entitled to punitive damages in a breach of contract case, it is essential to seek the advice of an experienced legal professional.