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Question
In a city rehabilitation project, a contractor’s foreman pressures workers to reuse damaged anchoring bolts and to bypass a mandatory safety test. A heavy rain causes a structural failure that damages a nearby shop and injures a passerby. The passerby sues for actual damages and separately seeks exemplary (corrective) damages, contending that the foreman’s conduct was grossly negligent and in bad faith to deter similar conduct. The court must decide whether exemplary damages may be awarded and, if so, under what conditions. Which statement best captures the doctrinal framework and its application to this scenario?