Punitive damages for breach of contract: what's so special about contract claims?

Author's draft submitted to SSRN working papers series; last revised October 19, 2006The thrust of this paper can be straightforwardly summarized in two propositions. (1)If we accept the principle of punitive damages in tort cases, their appropriateness in at least some suits for breach of contract cannot seriously be questioned. The issue is not so much whether punitive awards should be available for breach of contract, but when. (2)Subject to one possible exception, there is no need for specific restrictions on their availability in breach of contract cases. It is true that there may be a commercial necessity to prevent every breach of contract suit from becoming a potential punitive damages claim: but this, I suggest, can be perfectly well satisfied by applying principles similar to those that already govern damages in torts