Punitive damages, or exemplary damages, are design to be punitive or exemplary in nature (surprise!). The idea is that the court will award damages just to draw people attention. You may be familiar with the McDonald’s hot coffee case–the one where the lady spilled hot coffee from the drive-thru on herself, sued, and won millions of dollars. That type of award makes the news and sends the message: “Don’t make the coffee too hot!”
It’s not very often that you have a case that will make millions. That’s why these types of cases make the news. Most of the punitive cases you simply will never hear about.
Here’s what you need to know about Punitive Damages
First, you can’t get punitive damages for a simple breach of contract case. Punitive damages apply “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud or malice, express or implied.” NRS 42.005
Where punitive damages do apply, the amount may not exceed:
- Three times the amount of compensatory damages awarded to the plaintiff if the amount of compensatory damages is $100,000 or more; or
- Three hundred thousand dollars if the amount of compensatory damages awarded to the plaintiff is less than $100,000.
What Does This Mean
To me, this means you just should not commit fraud. It also means that plaintiff’s lawyers are going to be looking for extra-contractual causes of action so that punitive damages can be put on the table. If someone is seeking punitive damages against you, you need to understand the potential outcomes.