Compensatory damages

Definition

Compensatory damages are monetary awards granted to a plaintiff to compensate for losses suffered due to the wrongful actions of another party. These damages aim to restore the injured party to the position they would have been in had the injury not occurred, covering both economic and non-economic losses. They play a crucial role in various legal contexts, especially when assessing liability and determining appropriate remedies for harm caused by intentional torts, breaches of contract, and other wrongful acts.

5 Must Know Facts For Your Next Test

1. Compensatory damages can be divided into two categories: economic and non-economic damages, addressing both tangible and intangible losses.
2. In cases involving intentional torts, compensatory damages may also cover costs related to medical treatment and rehabilitation for the injured party.
3. The amount of compensatory damages awarded depends on the severity of the injury and its impact on the plaintiff's life, with courts often considering expert testimony.
4. Compensatory damages are designed not just to punish the wrongdoer but primarily to provide relief to the victim for their losses.
5. When breaches occur in contractual agreements, compensatory damages are calculated based on the expectation that the injured party would have received had the contract been fulfilled.

Review Questions

• How do compensatory damages function within the context of intentional torts?
  • In intentional tort cases, compensatory damages serve as a financial remedy for victims who have suffered harm due to another person's deliberate actions. These damages aim to cover both economic losses, like medical expenses or lost wages, and non-economic losses, such as pain and suffering. The goal is to return the injured party to their original position before the tort occurred, promoting accountability for wrongful actions.
• What distinguishes compensatory damages from punitive damages in legal proceedings?
  • Compensatory damages are intended to reimburse victims for their actual losses resulting from wrongful conduct, whereas punitive damages serve a different purpose: to punish the defendant for particularly harmful behavior and deter similar actions in the future. While compensatory damages address the victim's needs by covering both economic and non-economic losses, punitive damages are awarded based on the defendant's conduct rather than the plaintiff's injury.
• Evaluate how compensatory damages are calculated in breach of contract cases and their significance in contract law.
  • In breach of contract cases, compensatory damages are typically calculated based on the expectation measure, which considers what the injured party would have gained if the contract had been fully performed. This includes assessing lost profits and any additional expenses incurred due to the breach. The significance lies in promoting fairness by ensuring that parties are held accountable for fulfilling their contractual obligations while providing a mechanism for remedying breaches that can significantly impact an individual's or business's financial situation.

Related terms

Punitive damages: Monetary compensation awarded to a plaintiff over and above compensatory damages, intended to punish the defendant for particularly egregious behavior and deter future misconduct.

Economic damages: Quantifiable financial losses that a plaintiff incurs due to an injury, such as medical expenses, lost wages, and property damage.

Non-economic damages: Compensation for subjective, non-monetary losses, such as pain and suffering, emotional distress, and loss of enjoyment of life.