How are damages awarded under a contract any different from those awarded for committing a tort?
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Question: How are damages awarded under a contract any different from those awarded for committing a tort? [DJS 2010]Find the question and answer of Law of Torts only on Legal Bites. [How are damages awarded under a contract any different from those awarded for committing a tort?]AnswerThe law distinguishes between two types of legal claims: those that arise from a breach of contract and those that arise from a tort. While both types of claims involve harm to one party caused by another...
Question: How are damages awarded under a contract any different from those awarded for committing a tort? [DJS 2010]
Find the question and answer of Law of Torts only on Legal Bites. [How are damages awarded under a contract any different from those awarded for committing a tort?]
Answer
The law distinguishes between two types of legal claims: those that arise from a breach of contract and those that arise from a tort. While both types of claims involve harm to one party caused by another party's actions, there are significant differences in how damages are awarded.
Contracts are legal agreements between two or more parties that create obligations and duties that must be fulfilled. A contract can be either written or oral and can be enforceable by law. When one party breaches the contract by failing to perform their obligations, the other party can seek damages to compensate for the harm caused by the breach.
The damages awarded for breach of contract are typically designed to put the non-breaching party in the position they would have been in had the contract been performed as promised. This is known as "expectation damages." The idea is that the injured party should be restored to the position they were in before the breach as if the breach never occurred. The goal is to make the injured party whole, not to punish the party that breached the contract.
In some cases, the injured party may also be entitled to "consequential damages," which are losses that were caused by the breach but were not part of the original contract. For example, if a contractor breaches a contract to build a house, the homeowner may be entitled to consequential damages for the cost of hiring a new contractor to finish the job.
In contrast, tort law is concerned with the harm caused by wrongful conduct, regardless of whether there is a contractual relationship between the parties. Tort law covers a wide range of wrongs, including negligence, intentional harm, and strict liability. The purpose of tort law is to compensate the injured party for harm caused by the wrongful conduct, but also to deter similar conduct in the future.
Unlike contract damages, which are focused on putting the injured party in the position they would have been in if the contract had been performed, tort damages are focused on compensating the injured party for harm caused by the wrongful conduct. The goal is to make the injured party whole, but also to punish the wrongdoer and deter similar conduct in the future.
Tort damages can be divided into two categories: compensatory and punitive. Compensatory damages are intended to compensate the injured party for harm caused by wrongful conduct. These damages can include medical expenses, lost wages, and pain and suffering. Punitive damages, on the other hand, are intended to punish the wrongdoer for their conduct and deter similar conduct in the future.
Punitive damages are only awarded in cases of intentional harm or gross negligence, and only in limited circumstances. In most cases, the amount of punitive damages cannot exceed the amount of compensatory damages awarded. Punitive damages are controversial, and some argue that they are excessive and unfairly punitive.
Another key difference between contract damages and tort damages is the burden of proof. In a contract case, the injured party must prove that the other party breached the contract and caused harm. The injured party must also show that the harm suffered was a direct result of the breach. In a tort case, the injured party must prove that the wrongdoer caused harm through their wrongful conduct and that the harm suffered was a direct result of that conduct.
Overall, the key differences between damages awarded for breach of contract and damages awarded for torts are the purpose of the damages, the types of damages available, and the burden of proof. Contract damages are focused on putting the injured party in the position they would have been in if the contract had been performed, while tort damages are focused on compensating the injured party for harm caused by wrongful conduct and punishing the wrongdoer. Tort damages can be compensatory or punitive, while contract damages are primarily expectation damages.
Mayank Shekhar
Mayank is an alumnus of the prestigious Faculty of Law, Delhi University. Under his leadership, Legal Bites has been researching and developing resources through blogging, educational resources, competitions, and seminars.
