Exemplary Damages

Business, Legal & Accounting Glossary

Definition: Exemplary Damages

What is the dictionary definition of Exemplary Damages?

Dictionary Definition

n. often called punitive damages, these are damages requested and/or awarded in a lawsuit when the defendant’s willful acts were malicious, violent, oppressive, fraudulent, wanton or grossly reckless. Examples of acts warranting exemplary damages: publishing that someone had committed murders when the publisher knew it was not true but hated the person; an ex-husband trashes his former wife’s auto and threatens further property damage; a stockbroker buys and sells a widow’s stocks to generate commissions resulting in her losing all her capital (money). These damages are awarded both as a punishment and to set a public example. They reward the plaintiff for the horrible nature of what she/he went through or suffered. Although often requested, exemplary damages are seldom awarded. There have been major awards in egregious (remarkable or outstanding) cases, such as fraud schemes, sexual harassment or other intentional and vicious actions even when the provable actual damages were not extensive.

Full Definition of Exemplary Damages

Exemplary damages or punitive damages are compensation given in a personal injury case. They are damages which are greater than the loss suffered by the plaintiff and are used to punish the victim, not provide monetary compensation. The goal of exemplary damages is to warn other individuals and deter them from similar future actions.

Generally, the courts will evaluate the nature of the wrong, the character of the conduct involved, the degree of culpability of the defendant, the situation and the sensibilities of each party, the net worth of the defendant and the extent to which the conduct offends the public sense of justice and propriety before determining exemplary damages.

Exemplary damages are not allowed in all cases, but if they are allowed the plaintiff must generally prove the injury was caused by malice, wicked conduct or aggravated by violence. For example, if the injury claim was for fraud the plaintiff would have to prove malicious defamation, not simply negligence. If a claimant files a car accident claim they may be awarded exemplary damages if they are injured by a driver who intentionally runs them down with malice versus the driver who unintentionally ran a stop sign and caused an injury.

Many types of cases and states have limits to exemplary damages and will only allow exemplary damages to be a certain amount above compensatory damages.

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Definition Sources

Definitions for Exemplary Damages are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 28th April, 2020 | 0 Views.