BCL – L1 – SA – Q53 – Contract Law

Situations where exemplary damages are allowed.

Question

Exemplary damages are

A allowed in case of dishonour of a cheque by a banker having sufficient funds

B the difference between the contract price and the market price

C allowed where in case of breach of a contract, the plaintiff has not suffered any loss.

D none of these

Answer

Explanation:
The correct answer is A because exemplary (or punitive) damages are awarded in specific cases to punish the defendant and deter similar conduct, such as when a banker dishonors a cheque despite sufficient funds, which is a serious breach of duty. Option B refers to general damages (market-contract price difference), and option C is incorrect as exemplary damages are not typically awarded when no loss is suffered. Option D is incorrect as A is valid.

Tags: Breach of Contract, Contract Law, Damages, Exemplary Damages
Level: Level 1

Topic: Contract Law

Uploader: Samuel Duah