In a breach of contract case, compensatory damages are damages that:
A) allow the party suffering the breach to recover costs incurred by relying on the promise of the other party
B) allow the party suffering the breach to recover lost profits
C) allow the party suffering the breach to gain economically by imposing "affirmative punishment" on the breaching party
D) exceed what the party suffering the breach lost due to the breach
E) none of the other choices are correct

Question

Quizplus · Accepted Answer

Compensatory damages aim to compensate the party suffering the breach for any losses incurred as a result of relying on the promise made by the breaching party. This may include costs the party had to bear to rectify the breach, to replace goods or services that were not delivered, or to cover any losses that arose as a direct result of the breach. Compensatory damages are not meant to go beyond the actual losses suffered by the injured party.

In a Breach of Contract Case, Compensatory Damages Are Damages