On February 28, 2025, Justice Masley of the New York County Commercial Division issued a decision in Martha Stewart Living Omnimedia, LP v. Snow Joe LLC, 2025 NY Slip Op. 30683(U), holding that nominal damages are sufficient to meet that damages element of a breach of contract claim, explaining:
The elements of a cause of action for breach of contract are the existence of a contract, the party’s performance thereunder, the opponent’s breach thereof, and resulting damages.
. . .
Licensor argues that that the breach of contract counterclaim fails because Licensee does not allege any facts supporting damages; specifically that Licensee alleges in a conclusory fashion that it was injured and damaged by the breach of sections 7.6 (a) and (b) of the License Agreement and seeks damages in the amount of $5 million but in no event not less than any amounts allegedly due to Licensor by Licensee as set forth in Licensor’s Complaint.
Dismissal on this ground is not warranted. There is a difference between injury and damages and to establish liability for breach of contract there must be an injury to the complaining party regardless of whether that party suffered actual damages as a result of such injury. In Kronos, Inc. v AVX Corp., 81 NY2d 90 (1993), the Court of Appeals determined when a claim for tortious interference of contract accrues, holding that the statute of limitations does not start to run until plaintiff sustains an injury. In its analysis, the Court detailed the differences between tort and contract principles, stating
Nominal damages are always available in breach of contract actions, but they are allowed in tort only when needed to protect an ‘important technical right. For example, nominal damages have been recognized in tort to protect a landowner’s right to be free of trespass, but that exception from the established rule that actual injury must be shown is warranted because a continuing trespass may ripen into a prescriptive right and deprive a property owner of title to his or her land. There is no similarly compelling reason for departing from the actual injury rule when the trespass alleged is not to real property but to a chattel or, as in the present case, to an intangible property right arising under contract. In such cases, actual loss must be demonstrated. …
Fundamentally different functions are served by an action in tort on the one hand, and an action in contract on the other, and an understanding of that functional difference is critical to understanding why nominal damages are appropriate in one and not in the other. Contract liability is imposed by the law for the protection of a single, limited interest, that of having the promises of others performed … The law of torts … is concerned with the allocation of losses arising out of human activities. In other words, a party’s rights in contract arise from the parties’ promises and exist independent of any breach. Nominal damages allow vindication of those rights. In tort, however, there is no enforceable right until there is loss. It is the incurring of damage that engenders a legally cognizable right. To recognize nominal damages element of tort claims would be to wrest the cause of action from its traditional purposes–the compensation of losses–and to use it to vindicate nonexistent or amorphous inchoate rights when unlike in trespass to property, there is no compelling reason to do so.
The Court’s determination that nominal damages are always available for claims of breach of contract implies that the breach of the contract in and of itself is the injury to which plaintiff would be entitled to nominal damages at the least if it could not show actual damages. The Appellate Division, First Department has also sustained breach of contract claims in the absence of actual damages on the ground that nominal damages are available for those claims.
Following the Court of Appeals’ reasoning in Kronos and accepting allegations of the answer with counterclaims as true, Licensee’s allegations that Licensor breached sections 7.6 (a) and (b) of the License Agreement are sufficient to allege an injury to defendant. The breach of contract counterclaim is sustained.
(Internal quotations and citations omitted).