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Legal Terms - exemplary damages (punitive damages, vindictive damages) Damages awarded to punish the defendant rather than (or in addition to) compensating the claimant for the injury caused. These damages are considered exceptional in tort, as the general norm is that damages are only awarded to compensate for the loss that has been caused. They may be awarded in certain tort actions, including those that are (1) expressly authorized by statute, (2) to punish oppressive, arbitrary, or unconstitutional actions by government servants, and (3) when the defendant has intentionally determined that the profits associated with committing a tort (e.g., publishing a defamatory book) may exceed the damages at risk. Exemplary damages are awarded in such instances to demonstrate that "tort does not pay" (Rookes v Barnard [1964] AC 1129). Exemplary damages are not permissible in the event of a breach of contract.
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