A buyer and a seller enter into an agreement where the buyer agrees to pay $2500 for the seller's Rolex wrist watch. If the buyer breaches the contract by refusing to purchase the Rolex, he would be liable to the seller for actual (also known as compensatory) damages. Actual damages are the real losses sustained by the seller. Therefore, if the seller sells the Rolex to a different buyer for only $2000, the original breaching buyer is liable to the seller for $500, which equals the real losses incurred by the seller.
Actual damages
Money awarded to compensate for actual losses (also called "compensatory damages"). The amount awarded is based on the proven harm, loss, or injury suffered by the plaintiff. This award does not include punitive damages, which may be awarded when the defendant's actions are especially reckless or malicious.
See Birdsall v. Coolidge, 93 U.S. 64, 64 (1876) for a Supreme Court decision confirming that actual and compensatory damages mean the same thing.
See Damages, Punitive damages
Definition from Nolo’s Plain-English Law Dictionary
In a lawsuit based on one party's injuries, the loss or harm suffered by the injured person, or the specific amounts of money that the person loses as a result of the injuries, including lost wages and medical expenses. (See also: damages)
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:10 pm
Damages are given as a compensation, recompense, or satisfaction to the plaintiff, for an injury actually received by him from the defendant. Compensatory damages and actual damages mean the same thing -- that is, that the damages shall be the result of the injury alleged and proved, and that the amount awarded shall be precisely commensurate with the injury suffered, neither more nor less, whether the injury be to the person or estate of the complaining party.
