09/03/2026
When a contract is breached or a lawsuit is filed, the word “damages” can mean several different things.
Compensatory damages are meant to repay someone for an actual loss. Consequential damages may cover additional losses that result from the breach. Liquidated damages are amounts the parties agreed on in advance in the contract. Punitive damages are different, they are intended to punish especially wrongful conduct and are only available in certain cases.
Understanding the type of damages that may apply can be just as important as determining whether a claim exists in the first place.