- Petitioner
- Francisco
- Respondent
- Ferrer, Jr.
- Citation
- G.R. No. 142029
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Pardo, J.
- Decided
- 2001-02-28
- Disposition
- CA decision reversed
Moral and exemplary damages in breach of contract require bad faith
Summary
This case involves a breach of contract action arising from Fountainhead Bakeshop's failure to deliver a wedding cake as ordered and paid for. The Supreme Court reversed lower courts' awards of substantial moral and exemplary damages, ruling that such damages in breach of contract cases require proof of bad faith, wanton, or malicious conduct. Finding only negligence and insensitivity, not bad faith, the Court awarded nominal damages of P10,000.00 instead of the P250,000.00 moral damages and P100,000.00 exemplary damages awarded by the Court of Appeals. The decision clarifies the standards for awarding moral damages in contractual breaches and emphasizes that such damages are compensatory, not punitive.
Intellegal Wiki · Key Holding
Reversed the CA, holding that moral and exemplary damages for breach of contract require proof of bad faith or wanton, reckless, or malicious conduct; finding only negligence and insensitivity in the failure to deliver a wedding cake, the Court awarded only nominal damages of P10,000.
An editorially maintained summary of the rule this Supreme Court decision is cited for — not legal advice.