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This article is written by Ms Aporva Shekhar from KIIT School of law. This article elucidates the difference between the two terms used in legal parlance, ‘damage’ and ‘damages’

Introduction

The words might sound similar in the first instance, but in reality, they have their distinct meanings. The words damage and damages are used very frequently in cases of contracts, personal injury, libel and other similar causes of actions. Even though these two terms are significantly different from each other, sometimes in certain situations they might be used interchangeably or together in civil litigation. This often leads to confusion between the two terms for new learners who are unfamiliar with all the aspects to be considered while interpreting a particular term or terminology for legal application. The common element for both these terms is that the existence of either results in a claim for compensation.

The most common use of these terms can be found in the law of contracts. When a legally enforceable contract is breached and the parties refuse to honour their obligations resulting from the contract, which results in some form of loss or disadvantage which is termed as damage. When the existence of the damage has been established it results in a claim for compensation for the same which is also known as damages. In short, the relationship between the two terms is that of cause and effect and hence, these terms damage and damages are distinct from each other.

Damage

Simply put, the term damage in legal parlance refers to the loss or any form of injury or disadvantage caused to a particular individual through natural means, and accident or intentional actions with motives can be termed as damage. Damage caused could be a result of an inevitable disaster, carelessness on the part of the individual who caused it or just plain negligence. The important thing to understand here is that the loss that is suffered cannot always have a remedy if it is caused by a natural disaster or any inevitable accident which no reasonable man could foresee. But when a situation arises that damage caused is a result of actions taken by individuals with malicious intent, or even if the individual failed to take due care regarding the object on which the damage was inflicted, the sufferer of the damage will have a right to claim.

The term mainly focuses on the loss or injury that is suffered, the scholar, Pothier defines the word in a unique way, dommages et interets taking a multidimensional approach. He considers one aspect stating that it could be any loss or injury suffered and conversely he also considers the other dimension and further adds that it might also be explained as the lost opportunity to make any gains. When the damage sustained is a result of an inevitable accident or disaster the damage is sustained by the person alone. But when the damage sustained is a result of any activity resulting from the action or inaction of others the person may hold the causing agent accountable for the loss sustained. The establishment of damages is extremely necessary to reach the stage of damages, the existence of damage sustained can give rise to a claim for damages when certain things are proved.

Injury and damage

The terms damage and injury might be used interchangeably in common language but in legal parlance, these terms have different implications and meanings. Damage could be classified as a broad term that includes within its ambit Injury and its different types. Or these terms can be used to mean the same thing in several different situations and are in essence coextensive with each other.  The different types of injuries that might be suffered by a person are:

  • Injury to self- This refers to any harm that is inflicted on the person’s body and could translate to crimes such as assault as given under Section 351 of the Indian Penal Code 1860.
  • Injury to reputation- this refers to any harm or damage that is caused to a person’s social standing or reputation through the acts of another, this could include slander and defamation as given under Section 499 of the Indian Penal Code 1860.
  • Injury to rights- this includes any violations that are made to the legal and statutory rights of a person to prevent them from enjoying and exercising the same, this could include fundamental rights violations and violations of any other right guaranteed by a statute like easementary rights given by the Indian Easement Act 1882.
  • Injury to property- This kind of injury refers to any harm, interruption or violation that is caused to the continued enjoyment of a person’s movable and immovable property, this could include, trespass as defined under Section 441 in the Indian Penal Code 1860.
  • Injury to interests- any acts that result in the interference and disruption of a person’s interests, could include violations under Tort law.

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Damages

Damages might be associated with other terms that are used in legal parlances like compensation or indemnity. As mentioned before, damages are a result of damage sustained, the existence of damage gives rise to damages. Damages refer to any monetary compensation or other forms of remedy that is compulsorily ordered to be conveyed to the person suffering the loss by the person who causes it. It is important to note here that while the damage can exist without resulting in damages, the same cannot be said for damages alone.

Damages can only come into the picture when a loss has been suffered like in a case where A  and B have entered into a contract to purchase A’s boat but then A decided to sell B a yacht for the same price, there has been a breach of contract but B has suffered but since B suffered no loss no claim for damages can be made. Damages is the quantification of loss suffered by an individual to remedy the loss suffered. Damages can be awarded to people in cases of loss suffered to property, medical malpractice, the loss suffered in income or any other legal violation. An essential feature of damages is tangibility, but even this feature might differ from case to case depending on the nature of the damage sustained. The different types of damages are as follows:

  • Compensatory damages- this refers to damages that are being claimed by the sufferer of damage from the defendant for the damage caused due to their actions. Compensatory damages could be awarded in a case where a car has been destroyed by a negligent driver so that the negligent driver could be ordered by the court to pay an amount equivalent to the value of the car in its original form or another amount that would be required to make repairs to the same car. 
  • Incidental damages- this refers to the additional damages paid by the defendant for the additional cost that the sufferer might incur to contain the damage originally caused. An example of incidental damages could be when one of the parties to a contract breaches the contract before and as a result of the contract lapses and the other party must return the consideration provided for the services they were supposed to render as per the terms of the contract. Here the damage suffered might not be apparent but the lapse of the contract has resulted in the loss of income to one of the parties as a direct consequence, and incidental damages can be offered for such damages.
  • Consequential damages- this refers to the damages that are incurred as a result of the ancillary incidents that occur due to the original damage caused. A common example of this kind could be when a biker gets into an accident because instead of paying attention to driving he was observing another car accident on the road. Here the car accident did not directly cause the biker’s injury but it was a result of this original damage.
  • Nominal damages- refer to the damages that are paid for damage that cannot be proved conclusively by the sufferer. This concept could be closely associated with the Latin maxim damnum sine injuria, and therefore an example for the same could be where the plaintiff has suffered the breach of a legally enforceable right but has not suffered any actual loss like if a person has been prevented from exercising their legal right to vote, they cannot prove any damage that has been suffered but there still has been a violation of a legal right, and in the absence of equitable remedy the court may grant nominal damages.
  • Liquidated damages- refers to the damages that are to be paid according to the amount claimed by the petitioner when the Courts are unable to ascertain the amount. An example for the same could be when a builder has been charged to build a specific structure, but then he fails to honour his obligation, the court may determine a lump sum amount to be paid or the builder to be charged for every subsequent day that the project he was tasked with is not completed. It is intangible to assess the loss that has resulted from the delay but it is certain that a loss has been suffered so liquidated damages may be granted in this case.
  • Punitive damages- refer to damages awarded to penalize the defendant in cases where punitive measures are not applicable. A common example could be wherein an automobile manufacturer produces an automobile with a substantial defect that they are aware of, and due to this defect, a person suffers a loss, so the court may grant punitive damages to punish the automobile manufacturer for their conduct. Punitive damages are often claimed alongside compensatory damages.

Compensation and damages

The concept of damages and compensation are distinct from one another, as one refers to a monetary award and the other refers to a concept that attempts to redress any wrongdoing or loss suffered. These two are commonly used in cases and might be underwood by most to mean the same thing but these two are distinct terms. While damages can be in terms of money they are not always compensatory in nature and might be awarded to deter further violations of the same nature. And contrary to damages, compensation is a legal right that people who have suffered loss or injury or any other lapse on someone else’s part have. But the basic difference between the two terms depends on the facts of the case, compensation is always fixed on basic principles under Section 73 of the Indian Contract Act, 1872 and damages are ascertained based on varying circumstances unique to the instance prevalent in a particular case.

Distinction according to legislation

Section 73(1) and (3) of the Indian Contract Act 1872 provide for the claim of damages, clause one states that any damage that has been sustained by any party due to breach of contract can be awarded damages. Clause three of the above-mentioned Section talks about damages that may be awarded in case of violations of any obligation that resemble those arising out of a contract. From this provision, we can identify both the terms and their distinct meaning from the language of the provision. Here we can understand that damage is referring to the loss that was suffered, and subsequently, damages indicate the claim that arises due to the damages. The claim for damages cannot exist without the damage and the provision gives recognition to both the terms, in every situation where damage is sustained damages will follow.

The summarised distinction between the two terms

Damage

Damages

The loss or injury sustained

The reparation given as a result of Damage

Is the cause of action

Is the end result of the cause of action

Can be sustained without a claim for damages

Damages cannot exist without the existence of sustained damage

Loss is directed towards property or person

Damages are levied on individuals who are the direct or indirect cause of injury

Damage could be sustained by a legal entity or inanimate things

Damages are always directed towards legal entities

Conclusion

Through the above discussion, we can infer that though the terms sound similar they are very distinct when considered from the viewpoint of legal application. One refers to a cause of action the other refers to its consequence. One is used to describe the loss suffered, the other refers to the liability arising out of that loss for the guilty party. Damage and damages are almost used together and maybe even in the same sentence, but these terms couldn’t be more distinct from one another. The distinction between the two forms the basis of one of the most common remedies available to litigants.

References

  • https://courses.lumenlearning.com/masterybusinesslaw/chapter/legal-remedies-damages/

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