Contracts & ExecutionQuestion 867 of 1605
Nominal damages are awarded when:
a.The contract required liquidated damages
b.A breach occurred but the injured party proves little or no actual monetary loss
c.A party suffers massive proven financial loss
d.Punitive damages are appropriate
Explanation
Nominal damages are a small, token sum (such as one dollar) awarded to recognize that a legal right was violated by a breach even though the injured party proved little or no actual monetary loss. They vindicate the right rather than compensate a substantial loss. They are unrelated to situations of large proven losses, to liquidated damages clauses, or to punitive damages, which serve punishment rather than mere recognition of a technical breach.
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