Boise Dodge v. Clark

In early 1967, Boise Dodge still had several 1966 cars on the lot. The dealership manager decided to sell these 1966 cars that were being used for demonstrations. He told the service manager at the dealership to prep the cars & roll back their odometers.

Mr. Clark & his wife came to the dealership. Clark purchase a 1966 car without knowing the odometer had been rolled back.

When Clark learned that the car had been used with a lot of actual mileage not reflected on the odometer, he stopped making car payments to the dealership.

The dealership ("Boise") sued Clark to recover the value of the stopped checks.

Clark counter-claimed for breach of contract & deceit. He sought actual & punitive damages.

The jury awarded Clark $350 (the difference between the price as represented by Boise & the car's actual value). Moreover, the jury awarded Clark $12,500 in punitive damages.

Must the amount of punitive damages awarded to a party bear a reasonable relationship to the amount of actual damages suffered by the party?

Yes. The amount of punitive damages awarded to a party must bear a reasonable relationship to the amount of actual damages suffered by the party.

Punitive damages provide effective deterrents.

Punitive damages are a proper remedy if the breach of contract contains an element of fraud.