A consumer was awarded $10 million in a lawsuit after she was left paralyzed in an accident in which her vehicle rolled over. It was determined that the automobile company should pay her $2 million for medical care expenses, and an additional $8 million to punish the company for selling a faulty product. What type of damages does the $8 million represent?

Question

BlackTom AI · Accepted Answer

The question describes a situation where a plaintiff received an amount specifically intended to punish a company for selling a faulty product, in addition to compensatory recovery for medical expenses.
Option 1: Punitive damages. This type of damages is awarded not to compensate the plaintiff for losses, but to punish the defendant for egregious or willful misconduct and to deter similar conduct in the future. The $8 million described as punishment for selling a faulty product fits this purpose and is therefore punitive damages.
Option 2: Compensatory damages. These are designed to compensate the plaintiff for actual losses suffered, such as medical expenses, lost income, and pain and suffering. In this scenario, $2 million for medical care expenses would be aligned with compensatory damages, but the additional $8 million is specifically described as punishment, not compensation, so this option does not cover the entire $8 million.
Option 3: Nominal damages. Nominal damages involve a token, small monetary amount awarded when a legal wrong has occurred but no actual or compensable harm is proven. The case at hand involves substantial medical costs and a large punitive amount, so nominal damages are not applicable.
Option 4: Expectation damages. In contract law, expectation damages aim to put the plaintiff in the position they would have been in had the contract been performed, essentially the value of the bargain. This concept does not apply to tort cases about product liability or punitive awards for fault.
Option 5: Actual damages. Often used interchangeably with compensatory damages in some contexts, here the term would refer to the actual losses suffered by the plaintiff. While the medical expenses are actual/compensatory, the $8 million portion is not for actual loss but for punishment, so labeling the entire amount as actual damages would be inaccurate.

MKTG-2910-2 CB quiz 16

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