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.
Compensatory damages
See Actual damages.
Definition from Nolo’s Plain-English Law Dictionary
Money damages recovered as compensation for economic loss, such as lost wages.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:13 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.
