Term Paper: Damages the Law

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Damages

The law of damages is an attempt to establish a standard for measuring any potential monetary award for awarding those meriting compensation for their loss or injuries. There are essentially two primary classifications of damages under the law: tort and contract.

The purpose of contract damages is to place the injured party in substantially the same position as he would have been if the contract had been performed. In determining contract damages the injured party is entitled to recover profits that he would have received or, in the event that he cannot prove profits, he may recover expenditures made in reliance on the contract. All contract damages must have been within the reasonable contemplation of the parties at the time that the contract was made. In most circumstances, an injured party to a contract may not recover consequential damages for mental anguish.

Tort damages are similar to contract damages in that they also attempt to place the injured party in substantially the same position as he occupied prior to the injury. Tort damages are of two general types: general and special. General damages are those that naturally flow from the defendant's wrongful act and include medical expenses and lost wages among others. General damages do not need to be specifically pled but the second type of damages -- special damages -- must be specifically pled in the injured party's complaint. Special damages are losses that cannot be presumed or estimated because they are unique or special to the plaintiff's situation.

II. Equitable Remedies

Under British common law legal and equitable remedies were handled by different types of courts but in the United States this distinction was never made. Instead, the courts were permitted to handle both remedies. Equitable remedies are those that require that a defendant perform or refrain from doing a particular action. Such remedies are discretionary with the court and highly flexible to the situation. The essence of all remedies based in equity is to maintain a state of fairness between the parties. All equitable actions are determined by a judge. There is no right to a jury trial.

In tort cases, a court must balance the equities. In doing so, the granting of an injunction must not place any undue hardship on the defendant and the feasibility of enforcing the injunction must be considered. Injunctive relief in tort cases is extremely rare. Equitable relief in contract actions is far more common. The usual relief sought is specific performance and in order for the court to consider granting such relief the requesting party must demonstrate that the terms of the contract are sufficiently certain, that said party has complied with all conditions precedent to require defendant's performance, that enforcement of the contract is equitable, and that such enforcement is feasible.

III. Restitution

The remedy of restitution is based essentially on the concept of unjust enrichment, that is, it is a determination that it would be unfair for the defendant to benefit from retaining whatever he has received. Like all remedies, the purpose of restitution is to return the parties to the status quo by requiring that the defendant return specific property or by awarding an injured party a sum of money equivalent to the value of the defendant's benefit.

At common law, restitution arose from actions between parties that created implied contracts. These quasi-contracts were based upon the conduct of the parties and equity relief was created to avoid any party benefiting unjustly. Over time other equitable remedies have developed in the form of restitution to avoid other inequitable situations to develop. These remedies include constructive trusts that involve a defendant being required to transfer title to a plaintiff. In a constructive trust the defendant must have legal title to the property but his continued retention would result in an unjust enrichment and there is no other available remedy at law that can resolve the situation. There is also the creation of an equitable lien where it can be shown that a defendant land owner has benefited unjustly. The equitable lien affords the injured party the opportunity to enforce the unjust enrichment. The lien is enforceable by foreclosure and sale. A prior sale to a bona fide purchaser, however, cuts of the enforcement of an equitable lien. Two other forms of restitution remedies are subrogation and accounting for gains.

IV. Injuries to Tangible Property Interests

Injuries to tangible property interests include those to property rights, personal rights, and the misappropriation of money. As to the misappropriation of money, the injured party has a number of available remedies which include constructive trusts, equitable liens. In the case of commingled funds aggrieved parties are entitled to the full value of such funds and any property purchased through the use of such funds. Where more than one party has been aggrieved, the parties are entitled to a pro rata interest in any funds available to the aggrieved.

Injuries to personal property vary as do the available remedies. The remedies available differ based upon the nature of the personal property being affected. When personal property is destroyed, the measure of damages is the value of the property at the time of destruction, less salvage value, plus interest. The plaintiff's loss of use cannot usually be recovered. When personal property is merely damaged, the measure of damages is either the difference in value of the property before and after the harm or the reasonable cost of the repair plus loss of use. Loss of use is measured by the rental value of substitute property. Finally, the tortious taking and retention of personal property affords plaintiffs with a variety of remedies including self-help, replevin, and injunction. Plaintiffs may also request monetary relief from the court or equitable relief such as constructive trust or equitable lien.

There are a variety of injuries to real property that also may demand equitable and/or legal relief. These situations include tortious destruction or injury to the property, waste, trespass, encroachment, and nuisances. In all cases, all traditional remedies such as injunctive relief and specific performance are available.

V. Injuries to Business and Commercial Interests

All businesses are subject to tortious and contractual damages. The causes of such injuries vary but the measure of damages is determined by the nature of the damage. In the case of total destruction of a business the owners are entitled to a choice of remedies. They may choose to pursue recovery based on a projection of profits over the probable lifetime of the business. Alternatively, the owners may recover the market value of the business at the time the business was destroyed. In the case of a partial destruction, the business may sue for the diminution of the market value, the loss of profits, or a share of the market sales. In the event that malice can be shown, punitive damages may be recoverable. Finally, in the case of a new business that has not established a track record of profits the measurement of damages presents a unique and difficult problem. In such case, a recovery for lost profits is rarely allowed.

A problem unique to the business world is tortious interference with contractual relations. In such cases damages may be recoverable if the plaintiff is able to prove actual damages. In some states the plaintiff is able to recover not only for losses incurred as a result of the contract breach but also may recover for mental anguish and loss of reputation. In a minority of jurisdictions plaintiffs are entitled to recover only for provable contractual damages.

Due to the unique nature of business relationships, damages are also recoverable for actions involving the unlawful dissemination of trade secrets, patent infringement, and illegal use of copyrighted material. In all such cases the business can recover not only lost profits but also, in the most serious of cases, consequential and punitive damages are also recoverable.

VI. Injuries to Personal Dignity and Related Interests

Certain individual personal rights are afforded special consideration. These personal rights such as reputation, privacy, and interpersonal relationships are considered important and damages for infringement of these relationships can be quite extensive. For instance, in cases involving defamation, either libel or slander, pecuniary loss is not ordinarily required. The mere demonstration that defamation has occurred is sufficient and is actionable per se. In the case of public officials and public figures, however, there must be a demonstration of actual malice in order for a defamation action to be successful while in the case of a private citizen a mere showing of negligence is sufficient. Damages in such actions include not only general damages but also special damages. Damages can in such actions are presumed but the plaintiff's reputation, his standing in the community, the extent of the defamatory statement, and its effect are all considerations in determining damages. Other private rights provided special protection and collateral damages in the event that such rights are violated include family relationships, rights of association, civil and political rights, and religious status.

VII. Personal Injury… [END OF PREVIEW]

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Damages the Law.  (2011, December 31).  Retrieved July 19, 2019, from https://www.essaytown.com/subjects/paper/damages-law/8308068

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"Damages the Law."  Essaytown.com.  December 31, 2011.  Accessed July 19, 2019.
https://www.essaytown.com/subjects/paper/damages-law/8308068.