Contract Damages, Corrective Justice and Punishment

This article re-examines the established principle that contract damages compensate but do not punish from the theoretical perspective of corrective justice and, in particular, the version advocated by Professor Ernest Weinrib. Weinrib argues that corrective justice affirms the traditional view that contract damages should be circumscribed by compensatory functions, and the notion of punitive damages is inconsistent with the structure of corrective justice and hence contractual rights. The correctness of this conclusion depends, however, on what is understood by punishment. This article argues that punishment is not necessarily explicable only as a form of state punishment, but may (adopting the retributive idea of punishment expounded by Jane Hampton) also be understood as a form of correlatively-structured response that redresses the moral injury inflicted by one's conduct on another. If that is the case, punitive damages for breach of contract may be justified even within the framework of corrective justice.