In both tort and contract law, damages are awarded as compensation for harm suffered due to wrongful actions or breaches by another party. The type of damages awarded depends on the nature of the wrongdoing and the type of loss suffered. Below, we outline the main types of damages that may be awarded by the court in Cyprus under these two legal areas.
- General Damages General damages are intended to compensate for harm that cannot be easily quantified, such as physical injury, emotional distress, or reputational damage. These damages are awarded for losses that are difficult to measure but can have a significant impact on the individual’s life.
Example:
For instance, if a person is injured in a car accident due to another driver’s negligence, general damages might be awarded for physical pain and suffering, emotional distress, and the long-term impact on their quality of life. This could include compensation for permanent scarring or any long-term disability resulting from the accident.
- Special Damages
Special damages compensate for specific, measurable financial losses caused by the defendant’s actions. These damages are calculated based on actual losses that can be proven with evidence, such as receipts or invoices.
Example:
Imagine a business suffers a financial loss due to a supplier breaching a contract. In this case, special damages could be awarded to cover the actual financial losses, including lost revenue, costs incurred to replace the supplier, or any additional operational expenses directly linked to the breach of contract.
- Consequential Damages
Consequential damages, also known as “indirect” or “special” damages, compensate for losses that result from the defendant’s actions but are not immediately or directly caused by the action itself. These damages compensate for the knock-on effects of an incident.
Example:
For example, if a factory’s machinery is damaged due to faulty installation (a tort), consequential damages could include the loss of profit due to production delays while the machinery is repaired. Additional operational costs that arise indirectly from the incident, such as having to hire temporary machinery, would also be included in these damages.
- Punitive Damages
Punitive damages, also known as exemplary damages, are awarded to punish the defendant for egregious or grossly negligent behavior. These damages go beyond mere compensation and aim to deter similar conduct in the future.
Example:
If a company deliberately dumps toxic waste in violation of environmental laws, causing harm to the community, the court may award punitive damages. These damages are not meant to compensate for the harm caused, but rather to penalize the defendant and discourage such reckless behavior in the future.
- Nominal Damages
Nominal damages are awarded when a legal wrong has occurred, but the plaintiff has not suffered significant financial loss or harm. These damages are typically small amounts and are awarded to recognize that the plaintiff’s rights were violated.
Example:
In a defamation case, if a false statement is made that harms someone’s reputation, but there is no significant financial loss as a result (such as loss of income or professional opportunities), the court may award nominal damages. For example, if a person’s reputation is harmed by slanderous remarks that have no measurable impact on their career or relationships, nominal damages may be awarded simply to acknowledge the violation of their rights.
- Liquidated Damages Liquidated damages are pre-determined amounts of compensation specified in a contract, to be paid if a party breaches the contract. These damages are agreed upon by both parties at the time the contract is formed and provide certainty about the consequences of a breach.
Example:
In a construction contract, there might be a clause stating that if the contractor fails to complete the project by a specified date, they must pay a set amount per day of delay as liquidated damages. This ensures that the non-breaching party is compensated for any inconvenience or financial losses caused by the delay, with the amount clearly defined in the contract.
- Reliance Damages Reliance damages are awarded to compensate a party for losses incurred by relying on a contract or promise that was later breached. These damages aim to reimburse the party for the costs they incurred in preparing for or acting on the promise that was not fulfilled.
Example:
In the case of Anglia Television Ltd v Reed [1972] 1 QB 60, the court awarded reliance damages to Anglia Television, which had incurred costs preparing for a television show after actor Reed had agreed to appear but then breached the contract. Reliance damages were awarded to cover the expenses Anglia Television had already incurred, including costs for promotional materials and casting, which would not have been necessary had the contract been honored.
- Restitutionary Damages
Restitutionary damages are awarded to prevent the defendant from being unjustly enriched at the plaintiff’s expense. These damages are not designed to compensate the plaintiff for their own losses, but to ensure that the defendant does not retain any benefit derived from their wrongdoing.
Example:
If someone wrongfully retains property that belongs to another person, restitutionary damages may be awarded to return the value of the property or the profits the defendant has made from it. For instance, if a person sells a stolen item and earns money from the sale, restitutionary damages may require the defendant to return the proceeds from the sale to the rightful owner.
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The process of seeking compensation can seem complex and demanding, but with the guidance of the experienced lawyers at Papatheodorou Legal, the path to justice becomes clearer and more attainable. Whether you are pursuing compensation for financial loss or for personal or professional harm, we are here to provide the support and solutions you need. Contact us today for a confidential discussion about your case and learn how we can help protect your rights with the expertise and dedication that defines us.