Compensatory damages

In law, damages are an award, typically of money, to be paid to a person as compensation for loss or injury. The rules for damages can and frequently do vary based on the type of claim which is presented (e.g., breach of contract versus a tort claim) and the jurisdiction.

At common law, damages are categorized into compensatory (or actual) damages, and punitive damages. Compensatory damages are further categorized into special damages, which are economic losses such as loss of earnings, property damage and medical expenses, and general damages, which are noneconomic damages such as pain and suffering and emotional distress.

Compensatory damages are paid to compensate the claimant for loss, injury, or harm suffered as a result of (see requirement of causation) another's breach of duty. (e.g., in a negligence claim under tort law). Expectation damages are used in contract law.

Liability (to pay some compensation/damages) is established when the claimant proves, on the balance of probabilities, that the wrongdoer’s fault (breach or breaches of duty) was causative of some/tangible harm/loss/injury. Some harm = right to some compensation/duty to assess damages. No recovery is not an option.

When the burden of proof has been discharged/the claimant has proved causation of some harm, it gives rise to a right/entitlement to damages and a corresponding duty on the court/tribunal to assess the amount of compensation attributable to the harmful consequences in question Cf. The Conqueror, 166 U.S. 110(1897); Palmer v Connecticut Ry & Lighting Co, 311 US 544 (1941)

On a breach of contract by a defendant, a court generally awards the sum that would restore the injured party to the economic position they expected from performance of the promise or promises (known as an "expectation measure" or "benefit-of-the-bargain" measure of damages). This rule, however, has attracted increasing scrutiny from Australian courts and legal commentators.

When it is either not possible or not desirable to award the victim in that way, a court may award money damages designed to restore the injured party to the economic position s/he occupied at the time the contract was entered (known as the "reliance measure"), or designed to prevent the breaching party from being unjustly enriched ("restitution") (see below).

...
Wikipedia