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Compensatory Damages: General Damages, Consequential Damages, Punitive Damages, Nominal Damages, Liquidated Damages

Damages are a civil judicial remedy used to monetarily compensate a party for injuries caused by the wrongful conduct of another, resulting in loss, injury, or other detriment to one's person, property, or rights. Damages are awarded to a plaintiff for losses caused either by a defendant's conduct or to provide a remedy for the breach of a contractual relationship. Damages are sometimes also used to punish outrageous conduct and deter future misconduct. Damages are only one category of remedies; other remedies include restitution (restoring something to its rightful owner); injunctive relief (forbidding a party to do an act); mandamus (requiring a party to do an act); and declaratoryrelief (a judicial decision setting forth the legal rights of respective parties even when no further relief is ordered).

Damages are traditionally awarded in American dollars and are generally made in a single lump-sum payment. The one-time payment is meant to compensate for both past harms as well as those anticipated in the future. Although making only one payment simplifies administration, the amount of the judgement may prove insufficient in six months or ten years. Not only must the award accurately reflect compensation for future harm, it must also include calculations for future inflation and make reductions to present value for payments made now.

Damages are categorized depending upon their purpose. The most commonly employed categories are compensatory, nominal, liquidated, and punitive. Compensatory damages are intended to compensate a party for injury sustained or make good or replace a loss caused by a wrong. Their purpose is to put the plaintiff in the same situation she would have been in had the harm not occurred. Compensatory damages are not intended to enrich a plaintiff. Nominal damages are damages in name only, a trifling sum awarded to recognize an infringement of rights without resulting substantial loss or injury. Punitive damages are a penalty used where a defendant's conduct has been particularly egregious, vindictive, or malicious; they are not compensation for injury. Liquidated damages are those specified in a contract in the event of a breach.

Further Readings

  • Dobbs, Dan B. Dobbs Law of Remedies. 2nd ed. St. Paul, MN: West Publishing Co. 1993.
  • O'Connell, John F. Remedies in a Nutshell. St. Paul, MN: West Publishing Co. 1985.
  • West's Encyclopedia of American Law (various sections). St. Paul, MN: West Publishing Co. 1997.

Additional topics

Law Library - American Law and Legal InformationGreat American Court Cases