Nominal Damages (Overview: What Is It And How It Works)

What are Nominal Damages?

How do you legally define it?

What are the essential elements you should know!

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What Are Nominal Damages 

Nominal damages are a form of legal compensation that are awarded by the court when the plaintiff has the legal right to obtain them but was not able to prove a substantial loss.

In other words, the plaintiff was able to prove that the defendant committed a fault or a wrong but was not able to provide evidence that it suffered injuries.

What’s important to keep in mind is that when a plaintiff files a lawsuit against the defendant for damages seeking compensation for injuries, the plaintiff must prove that not only the defendant committed a wrong but it also suffered damages.

Without the evidence of damages, the court will not award the plaintiff any compensation.

However, in some cases, the court may award “nominal damages” to the plaintiff representing a very small amount to compensate it for all or parts of its legal costs.

Nominal damages may be awarded in two scenarios:

• The plaintiff sues for compensation but fails to present evidence of the financial loss or injuries 
• The plaintiff has not suffered any physical loss but has been victimized in certain ways 

Nominal Damages Definition

According to the Cornell Law School’s Legal Information Institute, nominal damages means:

As you can see from this legal definition, when we are talking about nominal damages, we are referring to a “nominal” or “trivial” compensation.

Why Nominal Damages

If the amount of “nominal” damage is so small, why would anyone want to legally pursue it?

The reality is that not every sues for “financial” compensation.

There are individuals who may want to pursue another so they can have the courts rule and declare that their rights have been violated or that the defendant has mistreated them.

While compensatory damages are intended to “compensate” the plaintiff for injuries suffered and proven in court, ‘nominal damages’ are awarded to commemorate the plaintiff’s vindication in court.

In essence, the plaintiff has a legal right to sue the defendant but was not entitled to compensatory damages.

Nominal Damages In Contract Disputes

How does nominal damages apply to contracts and contract disputes?

In contract disputes, damages are typically awarded in the form of compensatory damages, liquidated damages, restitution, punitive damages or nominal damages (in very rare cases).

The purpose of getting nominal damages can be important as it may open the door for punitive damages.

In essence, for a plaintiff to obtain punitive damages, it must either get compensatory damages, restitution damages, or nominal damages.

Generally, in contract disputes or breach of contract claims, punitive damages are not awarded.

However, if the defendant’s actions were clearly in bad faith or malice, and combined with tort claims, the court may award nominal damages so it can then award punitive damages to the plaintiff. 

Nominal Damages Example

Nominal damages represent a very small amount of money awarded to a plaintiff when it was in the legal right to sue the defendant but was not able to prove damages.

Typically, the amount of nominal damage awarded to the plaintiff is $1 or even $2.

For example, in cases where the plaintiff’s constitutional rights have been violated but who did not suffer actual damages, the court may award a $1 nominal damage and recognize that the plaintiff’s rights were violated.

In other cases, the courts may award a $1 nominal damage to the plaintiff to then award punitive damages.

The most famous nominal damages award was a $1 verdict in an antitrust lawsuit prosecuted by the United States Football League against the National Football League in 1986.

Another famous example of nominal damages is when the Prime Minister Winston Churchill was awarded a shilling (equal to about $0.25) in the context of a libel lawsuit he brought against Louis Adamic.

In essence, Louis Adamic had written that Winston Churchill had too much to drink and was drunk during a dinner at the White House.

Uzuegbunam v. Preczewski 

In the U.S. Supreme Court case Uzuegbunam v. Preczewski, the court ruled that nominal damages are appropriate means to redress violated rights otherwise now rendered moot.

There are many instances when a party has been wronged but is not able to sue for significant damages, rather it will sue for nominal damages.

Particularly, in cases where a person’s constitutional rights have been violated, we are likely to see a lawsuit filed by the plaintiff to have the court recognize the defendant’s wrongdoing.

The Uzuegbunam v. Preczewski clarified the question that a party may sue for nominal damages when a constitutional violation had occurred but has since been rendered moot.

Contemptuous Damages

In some jurisdictions, the plaintiff may be awarded contemptuous damages.

Just like nominal damages, contemptuous damages are trivial.

They are awarded to address a point of law or even of honor.

Generally, the loser of a case will be required to pay for attorney fees.

However, in the case of contemptuous damages, the plaintiff may be required to assume its own legal fees.

Nominal Damage Takeaways 

So what is the legal definition of Nominal Damages?

Let’s look at a summary of our findings.

Define Nominal Damages

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