Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to
A) establish, as a matter of principle, that HealthCare acted wrongfully.
B) provide Global with funds for a foreseeable loss beyond the contract.
C) provide Global with funds for its loss of the bargain.
D) punish HealthCare and deter others from similar acts.

Question

Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to
A) ​establish, as a matter of principle, that HealthCare acted wrongfully.
B) ​provide Global with funds for a foreseeable loss beyond the contract.
C) ​provide Global with funds for its loss of the bargain.
D) ​punish HealthCare and deter others from similar acts.

Quizplus · Accepted Answer

Compensatory damages are intended to provide the non-breaching party with the monetary equivalent of what was lost due to the breach. In this case, it means compensating Global Enterprise for the loss of the bargain they had with HealthCare Insurance, not to punish HealthCare or address losses beyond the contract.

Global Enterprise Enters into a Contract with HealthCare Insurance to Obtain