Compensatory Damages Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Compensatory Damages, written in plain English, along with examples of how it is used.

What is Compensatory Damages?

Payment made for damages or injury to a person or property that has actually occurred and nothing more.It has to be legally proved that the damges have occurred.It is different from punitive damges where damages can be awarded as a punishment or to set example to others.

History and Meaning of Compensatory Damages

Compensatory damages refer to the monetary compensation paid to a person who has suffered some kind of loss or injury due to the actions of another party. This type of damages is intended to restore the plaintiff to the position he or she was in before the injury occurred, by compensating them for the actual damages they have incurred. Compensatory damages are different from punitive damages, which are intended to punish the defendant for their actions.

Compensatory damages have been a part of the legal system for centuries, and are a basic component of tort law. The idea behind these damages is that if someone suffers an injury or loss due to another party's actions, they should be compensated for that loss. This is seen as a way of making the injured party "whole" again.

Examples of Compensatory Damages

  1. A person is injured in a car accident caused by someone else's negligence. The injured party may be entitled to compensation for their medical bills, lost wages, and pain and suffering.

  2. A company breaches a contract with another company, causing the other company to suffer financial losses. The company that breached the contract may be liable for compensatory damages to compensate the other company for their losses.

  3. A landlord fails to make necessary repairs to an apartment, causing a tenant to suffer from health problems. The tenant may be entitled to compensation for medical bills and other damages related to their injuries.

Legal Terms Similar to Compensatory Damages

  1. Punitive damages: a type of damages that may be awarded in addition to compensatory damages, intended to punish the defendant for their actions.

  2. Nominal damages: a small amount of damages awarded to a plaintiff when there has been no actual loss or injury, but there has been a violation of their legal rights.

  3. Liquidated damages: damages that are specified in a contract as a predetermined amount that will be paid in the event of a breach of the contract.