Posted January 14, 2014 by advocateguru in Learning Centre

Kinds of Damages

Ordinary Damages:

These types of damages are meant to provide pecuniary or monetary compensation to the injured party to put the party back into the position if the contract had been performed. It is the estimated amount of loss actually incurred by the injured party and the incurred amount of loss is provided by the other party in the contract. Thus, it applies only to the proximate consequences of the breach of the contract and the remote consequences are not generally regarded. For example, in a contract for the sale of goods, the damages payable would be the difference between the contract price and the price at which the goods are available on the date of the breach. These types of damages are called as General or Ordinary Damages.

Special Damages:

These damages arise from the special or peculiar circumstances under the breach of contract. For example, A delivered goods to the Railway Administration to be carried to a place where an exhibition was being held and told the goods clerk that if the goods did not reach the destination on the stipulated date he would suffer a special loss. The goods reached late. He was entitled to claim special damages. In these types of damages, the party is allowed to compensate only when there was a provision of special loss mentioned in the contract under the breach.

Exemplary Damages/Punitive Damages:

These damages are awarded to punish the defendant with an aim to set an example in the society. In two cases, however, the court may award such damages, viz.,

(i) Breach of promise to marry; and

(ii) Wrongful dishonor of a customer’s cheque by the banker.

In a breach of promise to marry, the amount of the damages will depend upon the extent of injury to the party’s feelings. In the banker’s case, the smaller the amount of the cheque dishonored, larger will be damages as the credit of the customer would be injured in a far greater measure, if a cheque for a small amount is wrongfully dishonored.

Nominal Damages

Nominal damages consist of a small token award, e.g., a rupee of even 25 paisa, where there has been an infringement of contractual rights, but no actual loss has been suffered. These damages are awarded to establish the right to decree for breach of contract.