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In a contract case, punitive damages are generally not awarded. This is because the law generally recognizes that parties should be allowed to breach a contract where it would be more economically efficient to do so.
Punitive damages are awarded when the defendant's conduct is determined to have been so "willful, malicious, or fraudulent" that it exceeds the legal criteria for mere or gross negligence. Punitive damages typically involve awards over and above the compensatory damage award.
There are only three elements to a breach of contract claim in Arizona. First, you must establish that there was a legally enforceable contract. Second, you must establish that the terms of the contract were breached. Lastly, you must suffer financial injury as a result of the breach.
The relevant criteria are: There is a legally binding contract. ... The other party has failed to perform their duties under the contract. ... You have suffered loss as a result of the breach. ... The breach occurred within the last 6 years. ... Collating and preserving evidence. ... Reserving your rights. ... Taking legal advice.
Four Types of Damages Available in a Breach of Contract Compensatory damages. Compensatory damages aim to restore the party who did NOT breach the contract back to the position they would have been in if the other party had held up their end of the deal as promised. Punitive damages. ... Nominal damages. ... Liquidated damages.
What Is Required to Prove Compensatory Damages? Causation: The defendant's breach must be the reason for the plaintiff's economic losses. ... Foreseeability: The losses must be foreseeable at the time of contract formation. ... Calculable: The losses must be quantifiable and able to be calculated into specific monetary amounts.
Because they are usually paid in excess of the plaintiff's provable injuries, punitive damages are awarded only in special cases, usually under tort law, if the defendant's conduct was egregiously insidious. Punitive damages cannot generally be awarded in contract disputes.
Punitive damages are rarely awarded for breach of contract. They arise more often in tort cases, to punish deliberate or reckless misconduct that results in personal harm.