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In civil cases, damages are the remedy that a party requests the court award in order to try to make the injured party whole. Typically damage awards are in the form of monetary compensation to the harmed party. Damages are imposed if the court finds that a party breached a duty under contract or violated some right. The sum of money included in the damages can be compensatory damages that are calculated based on the harmed party’s actual loses, or punitive damages intended to punish the wrongdoer.  The term "actual damages" is synonymous with compensatory damages and excludes punitive damages. 

In a contract case, punitive damages are generally not awarded. This is because the law generally recognizes that parties should be allowed to breach a contract where it would be more economically efficient to do so. Thus, the law does not punish a party for breach, it simply seeks to put the non-breaching party back into a fair position. This can mean the court awards the non-breaching party either expectancy damages which is what the party expected to receive under the contract, reliance damages which is the economic position the party would have been in had they not relied on the contract, or restitution which is an equitable remedy to take away profits from the party that breached. There are also liquidated damages which contract parties can agree to in advance in the event of breach. In contract law, if a court determines that damages will not properly compensate the injured party, the court may choose to award specific performance.

In a tort case, the injured party can receive compensatory damages to compensate for all types of losses, including direct costs for medical car, property damage, or lost wages. It can also include indirect costs such as compensating for pain and suffering or inconvenience. When a tort wrongdoer was willfully reckless or the harm was particularly bad, the court may award punitive damages in addition to compensatory damages. 

For certain types of injuries, statutes provide that successful parties should receive some multiple of their "actual damages" -- e.g., treble damages

Federal Material

U.S. Constitution and Federal Statutes
  • U.S. Code:
    • 15 U.S.C. §§ 15-15e - Restraint of Trade Suits
    • 26 U.S.C. - Damages and Income Taxation
    • 28 U.S.C. - Recovery of Damages Against the U.S. and Foreign States]
    • 45 U.S.C., Chapter 2 - Railway Carriers
  • CRS Annotated Constitution
Federal Court Rules and Judicial Decisions
  • Federal Rules of Civil Procedure:
    • Rule 9(g) - Special Damages
    • Rule 54(c) - Judgment
  • U.S. Supreme Court:
    • Recent Decisions Dealing with Damages

State Material

  • Uniform Laws
    • 7 U.C.C., Article 2, Part 7 - Remedies
    • Model Punitive Damages Act
  • State Statutes
    • Article 2 of Uniform Commercial Code as Adopted by Particular States
State Judicial Decisions
  • N.Y. Court of Appeals:
    • Damages Cases
    • Commentary from liibulletin-ny
  • Appellate Decisions from Other States

[Last updated in September of 2022 by the Wex Definitions Team]