Beth Roberts purchased a "new" car from Honest John's Car Lot six months ago. The sales agreement expressly described the vehicle as a new car, and all usual factory papers accompanied the sale. However, Beth discovered that the car actually was

acquired by Honest John's from another dealer who had used it as a demonstrator and loaned it to business friends on a regular basis. The car had more than 10,000 miles on it, a fact that had been concealed by turning back the odometer. Beth also discovered that Honest John's apparently had engaged in this practice before. Beth is suing for breach of contract. She is asking for compensatory damages equal to the difference between the new car price she paid and the average price the vehicle would have brought as a used car. In addition, she is asking for damages in the amount of $5,000. Honest John's attorney has told Beth that she will fight both claims and has advised Beth that the court will not award $5,000 as punitive damages for such a suit. What do you think?

?Honest John's probably will lose on both counts. Punitive damages are not common in breach-of-contract cases, but there is a trend toward awarding such punishing damages against a seller who has acted wrongfully and stubbornly, to discourage such actions by the seller in the future. In addition, the dealer will face regulatory agency action if it can be proved that he turned back the odometer to defraud.