Should courts deduct nonlegal sanctions from damages?

When legal and social norms regulate the same behavior, an act can trigger both legal and nonlegal sanctions. Should courts deduct the nonlegal sancti on suffered by the wrongdoer from damages owed to the victim? We provide th e answer for a legal system that seeks to minimize social costs. Nonlegal s anctions typically harm the wrongdoer and benefit other people. In principl e, courts should avoid overdeterring wrongdoers by deducting the benefit of the nonlegal sanction from compensatory damages. In practice, instead of d educting the benefit of the nonlegal sanction to other people, courts shoul d deduct the burden on the wrongdoer. Deducting the burden of the nonlegal sanction from compensatory damages typically improves the incentives of wro ngdoers and victims. We make practical suggestions for courts to implement our proposal that would significantly reduce damages in torts and contracts .