exemplary damages
Definition
Exemplary damages, also called punitive damages, are extra money a court orders a wrongdoer to pay on top of actual losses, meant to punish really bad behavior and warn others not to do the same thing. A judge or jury awards these when someone acted with malice, fraud, or reckless disregard for others, not just simple negligence.
Example
If a supplier knowingly sold you defective equipment and lied about it, a court might award you your actual repair costs plus exemplary damages to punish that deliberate dishonesty.
Watch Out
Exemplary damages are rare and unpredictable, so you should never count on receiving them when calculating potential recovery in a dispute.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.