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 intention of the party in default is, however, ordinarily immaterial. Hence, if there is an unintentional breach of the contract, compensatory damages and not nominal damages must be given.1 On the other hand, no matter how bad the intention of the party in default may be, the ordinary rule is that no more than compensatory damages may be given. Thus if a bank wrongfully refuses to honor a check drawn upon it,2 or the payee of a paid note sends it to a bank for collection again,3 actual but not punitive damages, can be given. To this rule, however, there is one class of exceptions. There are certain contracts which are personal or quasi-personal in their character, the breach of which may be attended by circumstances of indignity or insult, for which punitive damages may be given.4
2 .Jacoby v. Stark, 205 111. 34; 68 N. E. 557; Coolidge v. Neat, 129 Mass. 146; Goddard v. Westcott, 82 Mich. 180; 46 N. W. 242; Hahn v. Bettingen, 84 Minn. 512; 88 N. W. 10; Thorn v. Knapp, 42 N. Y. 474; 1 Am. Rep. 561; White v. Thomas, 12 O. S. 313; 80 Am. Dec. 347; Duvall v. Fuhrman, 2 Ohio C. D. 174; Brown v. Odill, 104 Tenn. 250; 78 Am. St. Rep. 914; 52 L. R. A. 660; 56 S. W. 840. Contra, that while allowance might be made for humiliation as compensatory damages, punitive damages could not be allowed even if defendant's conduct was malicious. Trammell v. Vaughan, 158 Mo. 214; 81 Am. St. Rep. 302; 51 L. R. A. 854; 59 S. W. 79.
3 Western Union Telegraph Co. v. Lawson, 66 Kan. 660; 72 Pac. 283.
4 Butler v. Telegraph Co., 65 S. C. 510; 44 S. E.91.
5 Birmingham, etc., Co. v. Nolan, 134 Ala. 329; 32 So.v715.
1 Cornell v. Rodabaugh, 117 la. 287; 94 Am. St. Rep. 298; 90 N. W. 599.