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damages

In civil cases , damages are the remedy  that a party requests that the court award to make the injured  party whole. Typically damage awards are in the form of monetary compensation to the harmed party. Damages are imposed if the court finds that a party breached a duty or violated some right . The sum of money included in the damages can be compensatory  damages that are calculated based on the harmed party’s actual losses, or punitive  damages intended to punish the wrongdoer. The term "actual damages " is generally synonymous with compensatory damages (depending on the jurisdiction ), and excludes punitive damages . 

Punitive damages are largely not awarded in contract disputes, except in some cases where the breach was an independent tort such as bad-faith conduct or fraud . See: Newton v. Standard Fire Ins. Co., 291 N.C. 105 (1976) , Hardwick v. Williams, 265 Ga. App. 752 (2004) , and ATSCO Holdings Corp. v. Air Tool Serv. Co.(N.D. Ohio, 2016) . This is because contract law is primarily compensatory rather than punitive. The law also tends to recognize that parties should be allowed to breach a contract where it would be more economically efficient to do so. Thus, the law does not punish a party for the breach, it simply seeks to put the non-breaching party back into a fair position. This can mean the court awards the non-breaching party either expectancy damages  (what the party expected to receive under the contract), reliance damages  (the economic position the party would have been in had they not relied on the contract), or restitution  (an equitable remedy intended to prevent unjust enrichment by requiring the breaching party to return the benefits received from the non-breaching party). There are also liquidated damages which contract parties can agree to in advance in the event of breach. In contract law, if a court determines that monetary damages are inadequate (e.g. due to unique/irreplaceable property), the court may choose to award specific performance .

In a tort case , the injured party can receive compensatory damages to recoup for all types of losses, including direct costs (medical care, property damage , lost wages , etc.) and indirect costs (to atone for pain and suffering  or inconvenience). When a tort wrongdoer was willfully reckless or the harm was particularly egregious, the court may award punitive damages in addition to compensatory damages. For certain causes of action, statutes may provide enhanced remedies based on a plaintiff's actual damages. For example, some statutes authorize treble damages , allowing a successful plaintiff to recover a predetermined amount of the proven actual damages.

[Last reviewed in June of 2026 by the Wex Definitions Team
]

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