Also known as: actual harms · actual injury
Written by attorneys · grounded in primary & secondary sources — see below
The real, proved injury or loss resulting from a breach or tortious act. It supplies the measure for assessing whether a liquidated damages clause is reasonable and for awarding compensatory damages in defamation.
Ashford Manufacturing contracted to supply custom parts to Apollo Energy. When Apollo terminated early, the contract's liquidated damages clause required payment of three years of projected profits. Ashford proved only six months of actual lost sales and minimal storage costs. The court reduced the award because the clause exceeded the proved actual harm.
Albert Allen published a false credit report stating that Antonio Alvarado had filed for bankruptcy. The report reached only five subscribers and caused no lost business or other measurable effects. Alvarado recovered nothing because he failed to prove any actual harm to his reputation.
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Dun & Bradstreet issued an erroneous report about Greenmoss Builders' bankruptcy filing that reached only five subscribers. Greenmoss proved no lost contracts or other concrete losses. The Court limited recovery to compensation for proved actual harm rather than presumed damages.
State Farm's bad-faith handling of the Campbells' claim caused them $1 million in actual economic harm. The jury awarded $145 million in punitive damages. The Supreme Court held that the award must bear a reasonable relationship to the actual harm sustained by the plaintiffs.
Steenberg Homes drove across the Jacques' snow-covered field to deliver a mobile home despite their explicit refusal. The Jacques suffered no physical damage to the land. The court permitted punitive damages because the intentional trespass itself supplied the requisite actual harm.
A magazine article falsely accused attorney Elmer Gertz of Communist affiliations. Gertz proved only modest reputational injury and no special economic loss. The Court required proof of actual harm before permitting presumed or punitive damages in a private-figure defamation suit.
A clause is unenforceable when the amount is unreasonable in light of the anticipated or actual harm caused by the breach. Courts compare the stipulated sum to the proved loss and the difficulty of proving that loss.
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The plaintiff must prove actual harm to reputation rather than relying on presumed damages. Without a showing of knowledge of falsity or reckless disregard, presumed damages are unavailable.
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Yes. An intentional trespass to land itself constitutes actual harm sufficient to support punitive damages even when no physical damage occurs.
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Punitive awards must bear a reasonable relationship to the actual harm the plaintiff suffered. Wealth of the defendant alone cannot justify an award grossly disproportionate to that harm.
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…it took every reasonable precaution to ensure the accuracy of its assertions. And liability may far exceed compensation for any actual injury to the plaintiff, for the jury may be permitted to presume damages without proof of loss and even to award punitive damages. We hold that, so long as they do not impose liability without…