Punitive Damages As Aggravated Damages: The Case of Contract

In his interesting survey of "Recent Developments in the Canadian Law of Punitive Damages", Professor Feldthusen has identified three areas of particular interest. First, he compares the Canadian experience with punitive damages with the experience in the United States. Second, he argues that the purpose or rationale for punitive damages is punishment, not deterrence. And, third, he considers recent developments concerning punitive damages in a contractual context. This paper will eventually come to concentrate its attention on this third area of interest, punitive damages in contract, but it will do so in a way that implicates Professor Feldthusen's other two concerns in the process. In particular, by developing an essentially compensatory theory of "punitive" damages as aggravated damages rather than one based on either punishment or deterrence, it will show that some of the traditional views that restricted the availability of punitive damages in contract, as well as more recent developments in Canada and the United States that have expanded their availability in certain contexts, can be better explained and understood. The paper finishes with some speculative remarks on what, given a compensatory theory of "punitive" damages as aggravated damages, the quantum of damages should properly be