Define compensatory damages.

• A. Reimburses plaintiff for actual losses
• B. Punitive damages
• C. Nominal damages
• D. Liquidated damages

Answer: (A)

Compensatory damages are money awarded to reimburse the plaintiff for actual losses caused by a wrongful act or contract breach. The goal is to restore them to the position they would have been in if the harm had not occurred, covering both economic losses (like medical bills, lost wages, property repair) and non-economic harms (such as pain and suffering). This differs from punitive damages, which aim to punish the wrongdoer; nominal damages, which are a small amount awarded when no actual loss is proven; and liquidated damages, which are a pre-set sum specified in a contract regardless of the precise losses. Therefore, reimbursing the plaintiff for actual losses best captures what compensatory damages are.