Punitive Damages

In one sentence

Extra money awarded to punish wrongful conduct and deter future misconduct.

Plain English

Punitive damages go beyond compensating you for your actual loss; they're meant to punish the other party for especially bad behavior and discourage similar conduct in the future. These are rare in contract cases and more common in situations involving fraud, gross negligence, or intentional harm. The amount can be much larger than your actual damages because the goal is deterrence, not just making you whole.

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Example

A company knowingly sells a defective product that injures someone, hiding safety test results. A jury awards $50,000 in compensatory damages for medical bills plus $500,000 in punitive damages to punish the company's deliberate deception.

Used in a sentence

“The judge awarded punitive damages because the defendant's conduct was so reckless and intentional that mere compensation seemed insufficient.”

Related terms

Breach

A failure to do what a contract requires, such as not paying or not delivering.

Fraud

Intentional deception or misrepresentation made to trick someone into entering a contract or deal.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

Offeror

The person who makes an offer to enter into a contract.

Offeree

The person who receives an offer and has the power to accept or reject it.

Mutual Assent

Both parties agree to the same contract terms at the same time.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.