R2d § 355

Element: punitive damages are NOT recoverable for a breach of contract unless the conduct constituting the breach is also a tort for which punitive damages are recoverable.

Common misunderstanding: students assume bad-faith breach exposes the breacher to punitives. § 355 says no: bad faith alone is insufficient. The breach must independently be a tort (fraud, intentional infliction, conversion) AND that tort must independently support punitives.

This is one of the cleanest chok-style rules in contract law. The rationale is the efficient-breach idea: contract law compensates expectation but does not punish breach; the moral judgment of contract is bound up with restoration, not retribution. Compare insurance bad-faith cases, where some states have created punitive exceptions by statute or by tort doctrine.