A court may award you nominal damages if you haven't suffered substantial injuries or losses that deserve monetary compensation. The court may do this just to recognize your injuries or losses. As such, you may only be awarded insignificant money as compensation, even one or two dollars. Here are three important things you should know about nominal damages:
It Must Be Preceded By another Form of Damage
The court cannot award punitive damages as the only damages in a lawsuit; other damages must be awarded first. These other damages include compensatory and nominal damages. In fact, this is one of the significances of nominal damages, which are awarded by courts to recognize that the defendant caused you harm.
For example, if the defendant breached a contract, but you cannot quantify the loss or injury, the court may award you nominal damages in the tune of an insignificant amount of money. However, the award opens up the way for you to seek punitive damages.
The Defendant's Act Must Be More Than Negligent
You don't deserve to be awarded punitive damages just because the defendant caused you harm. If his or her actions were negligent, then you may get other forms of damages, such as compensatory, but he or she may not be punished. However, if his or her actions were intentional or malicious, then your chances of getting punitive damages skyrocket.
Consider an example in which a farmer signs a contract to supply you with oranges. After harvesting the oranges, he or she sells them to another businessperson instead. This can be malicious, intentional or both, which means you may be awarded punitive damages. However, if he or she fails to supply you with the oranges because freak weather damaged the crop, then he or she may not be punished.
It Must Be Relatively Proportional to the Damage
Lastly, you should know that nominal damages will be proportional to the actual damages for which you sued. Therefore, if your losses were high, then you may expect a high amount of punitive damages, and vice versa. This is because the award amount should be enough to punish the defendant and deter him or her from similar actions in the future. Lower (in comparison to actual damages) punitive damages may not achieve this objective.
Note that you still need to win the case before being awarded nominal damages. For example, if you are involved in a breach of contract lawsuit, you have to prove that the defendant breached a legally binding contract.
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