Question

Good contracted to build a house for Stern according to Stern’s plans. After the house was completed, there were several defects that Good refused to fix. Stern then contracted with Madden to do the necessary corrective work for $8,000 and then sued Good for $8,000 in compensatory damages. Stern also demanded $10,000 in punitive damages “to punish Good and set an example for others.” Is Stern entitled to compensatory damages? Is Stern legally or ethically entitled to punitive damages?

Answer 1

Good contracted to build a house for Stern according to Stern’s plans. After the house was completed, there were several defects that Good refused to fix. Stern then contracted with Madden to do the necessary corrective work for $8,000 and then sued Good for $8,000 in compensatory damages.

After looking at the situation it seems that, Stern is entitled to compensatory damages. This is because Good contracted to built the house according to Stern's plan and hence it is his duty to give the house according to the plan without any defect, though defects may occur anywhere but since Good contracted so he needed to fix it and can't refuse to do so. Since he refused to do so, he needs to oay for it. So Stern is entitled for the compensatory damage which he incurred in the correction of the mistakes done by Good.

There may be a doubt about the legal and ethical view on punitive damages in this case, but according to me since Good has not gone according to the contract which decreases the value of contract and hence Stern is entitled to the punitive damages. This is because it may lead to similar problems of not following the contract in future by different people which is not good and hence if Good is punished with the Punitive damages it will set an example for other contractors or anyone else who sign a contract.