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What are compensatory damages?

Compensatory damages are often referred to as money damages and will generally be applicable if the guilty party has breached the terms of the agreement in the contract. Compensatory damages will both be money damages for the current period as well as all foreseeable periods if the plaintiff is able to prove foreseeable damages as a result of the breach. Examples of compensatory damages consist of breaches of contracts during sale of goods and during the sale of services:


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  • What are liquidating damages?

    Liquidating damages are the potential damages specified as the total amount of compensation in which the aggrieved party will be able to seek, if the other party involved breaches the contract. Liquidated damages are predetermined prior to entering the contract, and for it to be legally enforceable, the nature of the contract should be such […]

  • What are punitive damages?

    Punitive damages will only be available in breach of contract if the breach involved fraud. Punitive damages are much more severe than compensatory damages and will often be unavailable due to a breach of contract.

  • What happens if either party breaches a contract?

    In certain circumstances, contracts will be breached if one party fails to perform the terms of the agreement within the contract. If the terms of the agreement have been breached, the guilty party can be subject to potential punishments such as compensatory damages and discharge from the original contract. In a breach of contract, the […]