Law of Contracts

When parties arrive in a small claims court, the claim and possibly counterclaims can almost always be boiled down to a dispute on an agreement, contract, or promise. The plaintiff usually asks for a nice round figure for their damages while the judge usually gives a smaller number. Why is this?

The law of contracts is such that when an agreement is broken, the remedy is to put the parties in the place that they were before the agreement is struck. So for example, if someone agrees to repair your fair market value $100 bicycle and when repairing it, they damage it beyond use anymore, all you will receive is $100 in damages.

Plaintiffs often feel they are entitled to a brand new bike or the cost of the bike when it was purchased. The court will not find for these higher damages because you already lowered the bike's value before repairing it. Moreover, the bike was not new when you brought it in for repairs so you can only recover the value of the bike upon delivery.

Thus, when people ask for $350 to a bike with a fair market value of $100, the judge will ask where they are coming up with that figure. Reasons such as they thought the owner of the bike shop was rude or they haven't been able to use their bike since the incident won't make up the difference.

When assessing damages, the law is interested only in material damages and activities, not inconsequential behavior such as the bike shop owner was snappy. Extra damages in court shows will usually come from punitive damages where the judge thinks the defendant was deceptive, egregious in behavior, or fraudulent.