transcript
0:02
2 secondsLet's talk about damages. Damages are a critical component of any case, and a great lawyer will
0:08
8 secondsmake sure you get all of your damages paid if you're involved in a lawsuit. So, what damages are
0:15
15 secondsis a way of saying, look, something has gone wrong and you've been damaged in some way and you're owed money. There are two types of damages. One is consequential damages and the second
0:25
25 secondsis punitive damages. So the first consequential damages. Think about consequential damages as the
0:31
31 secondsconsequence of whatever somebody else did. Let me give you an example of consequential damages.
0:38
38 secondsI represented a client who had a website that was very successful in the e-commerce space and
0:44
44 secondsshe was getting ready for Black Friday and she hired a third-party vendor to redo her website.
0:52
52 secondsThis third party vendor also told her that they needed to revamp the backend that fulfills the
0:57
57 secondsorders. And she told the vendor that she was expecting millions in sales on Black Friday
1:05
1 minute, 5 secondsbased on her historical sales. So she hired this vendor and ultimately the vendor didn't do what
1:12
1 minute, 12 secondsthey were supposed to do. They completely messed up the backend of this website during what was
1:18
1 minute, 18 secondsthe best sales period for her website throughout the year. Unfortunately, the client lost millions
1:25
1 minute, 25 secondsof dollars in sales because the developer failed to do what they were supposed to do. So,
1:31
1 minute, 31 secondsthis is a breach of the contract. So, she was able to go after the website vendor as a direct
1:38
1 minute, 38 secondsresult of their failure to set up the website correctly. Now, of course, the vendor argued, "Look, we didn't get paid millions of dollars for this. We're not responsible for millions
1:48
1 minute, 48 secondsof dollars of damages." But the reality is that vendor was responsible because they knew that she needed this website for her Black Friday sales. They knew she was expecting a high amount
1:58
1 minute, 58 secondsof volume. They knew that she wouldn't be able to fulfill the orders from her website if they
2:03
2 minutes, 3 secondsdidn't do the website correctly. So ultimately, they took responsibility for the damages if they
2:10
2 minutes, 10 secondsdidn't perform on their end of things. And it doesn't matter that they weren't paid millions of dollars to develop the website. The reality is they took the responsibility to develop the
2:20
2 minutes, 20 secondswebsite correctly and their failure to do it. And the damages that resulted from their failure to do
2:26
2 minutes, 26 secondsit correctly are considered consequential damages. Think about consequential damages like dominoes.
2:32
2 minutes, 32 secondsIf somebody pushes that first domino, every domino that falls after that first domino as a
2:38
2 minutes, 38 secondsresult of that first domino being pushed is their responsibility. It's a natural consequence of that
2:43
2 minutes, 43 secondsfirst domino being pushed and their appropriate consequential damages. The right lawyer will help
2:49
2 minutes, 49 secondsyou figure out exactly what your consequential damages are because this subject is a lot more
2:55
2 minutes, 55 secondscomplex than it might seem. There's a lot of itemized consequential damages that your lawyer
3:01
3 minutes, 1 secondwill be able to help you think through. So, make sure you talk to your lawyer before you go after
3:07
3 minutes, 7 secondsthe other side. Make sure you're not leaving money on the table. Let's talk about the second type of damages, punitive damages. While compensatory damages are to compensate you for the harm,
3:16
3 minutes, 16 secondspunitive damages are to punish. And in California, it's Civil Code Section 3294 that talks about what
3:23
3 minutes, 23 secondskinds of cases punitive damages are available in. Punitive damages are really only available
3:30
3 minutes, 30 secondsin cases where somebody does something malicious or intentional or fraudulent. Think about somebody
3:36
3 minutes, 36 secondspunching somebody else. Now, normally that's a criminal case, but there's also a civil component to it. If somebody intentionally harms somebody else, that can be willful or malicious conduct
3:47
3 minutes, 47 secondssuch that it can be subject to punitive damages to punish the person. Now, normally the law is
3:53
3 minutes, 53 secondsthat you're not supposed to punish somebody for accidentally doing something wrong. For example, you're not supposed to get punitive damages just because somebody accidentally ran their
4:03
4 minutes, 3 secondscar into your car. You're not supposed to get punitive damages if somebody breaches
4:08
4 minutes, 8 secondsa contract just because they didn't really know what they were doing. But you can get punitive
4:14
4 minutes, 14 secondsdamages if somebody intentionally tries to harm you or if somebody fraudulently rips you off or
4:20
4 minutes, 20 secondsis running a scam. You can get punitive damages. And the nice thing about punitive damages compared
4:26
4 minutes, 26 secondsto compensatory damages is punitive damages are generally not dischargeable in bankruptcy. So,
4:32
4 minutes, 32 secondsif you get punitive damages against somebody, they're not going to be able to declare bankruptcy and get out of it. So, make sure you talk to your lawyer about the opportunities to get
4:42
4 minutes, 42 secondsboth compensatory damages and potentially punitive damages so you're not leaving money on the table.
4:48
4 minutes, 48 secondsIf you have any questions about this, reach out to me. My office and I are happy to help you. [Music]