This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The general rule is that damages for breach of contract must be compensatory only, and not punitive.1 There are, however, certain classes of cases in which punitive damages are sometimes given. These are cases of contracts personal or quasi-personal in their nature, a breach of which under circumstances of wantonness may cause disgrace, humiliation or great injury to the feelings of the injured party. A breach of a contract to marry may be attended with such circumstances of injury to the feelings as to justify the award of punitive damages.2 So if the failure to deliver a telegram announcing the death of a near relative is due to gross negligence,3 or to deliberate intention,4 on the part of the telegraph company, punitive damages may be allowed. Punitive damages are allowed for breach of contract by a common carrier under special circumstances. Thus if a carrier takes a passenger beyond his destination, either through wilfulness or through gross negligence,5 punitive damages may be allowed. It is evident, however, that these are apparent rather than real exceptions to the general rule. While these rights are founded upon contract, the actions are in effect actions in tort, and are governed by the rules of damages applicable in case of tort and not by those applicable in case of contract.
9 Speirs v. Drop-Forge Co., 180 Mass. 87; 61 N. E. 825.
10 Colburn v. Ry., 109 Wis. 377; 85 N. W. 354.
11 American National Bank v. Mo-rey, - Ky. - ; 58 L. R. A. 956; 69 S. W. 759; Wiley v. Bank, 183 Mass. 495; 67 N. E. 655.
12 Radloff v. Haase, 196 111. 365; 63 N. E. 729; reversing 96 111. App. 74; Grinnell v. Bebb, 126 Mich. 157; 85 N. W. 467; Turner v. Carter, 1 Head (Tenn.) 520; Raymond v. Yarrington, 96 Tex. 443; 97 Am. St. Rep. 914; 73 S. W. 800; reversing (Tex. Civ. App.), 69 S. W. 436; Fullam v. Stearns, 30 Vt. 443.
13 Radloff v. Haase, 196 111. 365;
63 N. E. 729; reversing 96 111. App. 74; Raymond v. Yarrington, 96 Tex. 443; 97 Am. St. Rep. 914; 73 S. W. 800; reversing (Tex. Civ. App.), 69 S. W. 436.
14 Jewett v. Wilmot, 51 Neb. 700; 71 N. W. 775.
15 Carver v. Taylor, 35 Neb. 429; 53 N. W. 386.
16 Koch v. Godshaw, 12 Bush. (Ky.) 320; Barnes v. Brown, 130 N. Y. 372; 29 N. E. 760; Zipp v. Rubber Co., 12 S. D. 218; 80 N. W. 367.
1 Snow v. Grace, 25 Ark. 570; Hoy v. Gronoble, 34 Pa. St. 9; 75 Am. Dec. 628; Gordon v. Brewster, 7 Wis. 355.