Friday, January 27, 2012

Jury Awards Punitive damages for broken gift restrictions

This week a jury awarded $1 million in damages ($500k in actual damages and $500k in punitive damages) to Garth Brooks from a hospital that Brooks claimed reneged on its gift agreement. Mr. Brooks gave the hospital a $500,000 gift and asked that the Women's Center be named after his mother. The hospital claimed that it made no promises at the time of the gift, but that Mr. Brooks later mentioned the request. The jury decided that the hospital should repay the donation, plus it punished the hospital so that they would not deny a similar deal in the future.

The lesson for charities is to require that all restricted gifts be documented with a written gift agreement. Further, if the charity later changes its mind about the restrictions, it should return the gift.

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