Punitive Damages

Punitive DamagesI bought a house but the people who sold it told me I could move in this month and they’re not out yet. I can sue them and get punitive damages, can’t I?

No, you can’t!

If you are successful suing someone for a breach of contract, such as a contract for the sale of a house, you may obtain the “benefit of the bargain” and your “consequential damages.” Consequential damages are basically out of pocket expenses, or whatever money you lost because of the other party’s failure to live up to their end of the bargain.

For example, if you had to rent another place or pay extra for moving expenses, those costs could be awarded to you as consequential damages. Under Maine law those are the only kinds of damages you can recover for a breach of contract.

You could also sue to have the contract enforced, and this is called “specific performance.”

“Punitive damages” are a penalty for very bad behavior and are allowed in tort cases, such as drunk driving accidents where someone is injured. For the jury to consider punitive damages, however, the judge has to determine first that the person’s conduct was malicious or so awful as to “impute malice.” These damages are not permitted in a contract case, no matter how annoying the other person’s behavior is.

In some contracts the parties agree to “liquidated damages,” or a specific amount of money that may be awarded to you if the other person breaks the contract. These damages can be awarded even if they are more than what you actually lost as a result of the broken contract.

But remember, if you sue for breach of contract, generally you are entitled to recoup what you lost on account of the contract being broken, nothing more.

It’s the law!

Mills, Shay, Lexier & Talbot Areas of Practice

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Map Skowhegan OfficePhone: 207.474.3324
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