What are Nominal Damages?

Posted by Catherine Robinson on

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The aim of damages in both Contract Law and in Tort Law is to compensate the innocent party for the loss or injury they have suffered due to the wrongdoing party's actions. Nominal damages are a small amount of money that must be paid to the innocent party to acknowledge that they are legally in the right without unfairly compensating them for loss they haven't actually suffered.How to Get a First in Law

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What are Nominal Damages in Contract Law?

Nominal damages in Contract Law are awarded if one party breaches a term of the agreement. However, damages will be calculated based on the innocent party's actual loss. Since contractual damages are therefore not punitive, it follows that an innocent party who has suffered no loss cannot recover much compensation. This is where nominal damages come into play. As Parke B stated in Robinson v Harman, Contract Law places the innocent party in the position they would have been in had the contract not been performed. 

Charter v Sullivan

In this case, the defendant had agreed to purchase a car but subsequently backed out of the agreement, putting himself in breach of contract. However, there was a good market for the car, meaning that the claimant could fairly easily find a new buyer. Therefore, he had suffered no actual loss due to the defendant's refusal to complete the transaction and was accordingly awarded nominal damages.

Surrey County Council v Bredero Homes Ltd

Here, the council had sold land with planning permission to build 72 houses to the defendant developer. The developer then obtained new planning permission to build an extra five houses. The council sought damages for the additional profit the developer had made as building the additional five houses had put the developer in breach of contract. The Court of Appeal awarded the council nominal damages for the breach as it had not suffered any actual loss.

What are Nominal Damages in Tort Law?

The primary focus of damages in Tort Law is to compensate the injured party for the damage they have suffered. However, there are a number of non-compensatory classes of damages, of which nominal damages generally fall into. These classes are as follows:

1) Exemplary Damages

These damages are a larger sum than would usually be awarded that acts to punish the defendant, as stated by Lord Devlin in Rookes v Barnard.

2) Contemptuous Damages

These damages are for a smaller sum than usual to express the court's annoyance that the claim has been brought (even though the claimant is legally in the right). See e.g. Grobbelaar v News Group Newspapers Ltd.

3) Aggravated Damages

Aggravated damages serve to compensate the claimant for the unusually high degree of loss they have suffered due to the defendant's actions. Therefore, they are for a larger sum than usual. See e.g. Johnson v Steel and Others.

4) Nominal Damages

For these types of damages to be awarded, a legal wrong must have been committed. However, the loss suffered will have been negligible or non-existent. The damages are usually fixed at £5.

Walker v The Commissioner of the Metropolis

Here, a case was brought based on the false imprisonment of the claimant as he had been trapped in a doorway for a few seconds by a police officer. The Court of Appeal held that the claimant had indeed been falsely imprisoned, but had suffered no loss. On this basis, a nominal award of £5 was given to the claimant.

Please feel free to leave a comment if there's anything you'd like clarifying!

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