In law, damages refer to the money paid or awarded to a person (either natural or legal) following a successful claim by that person in a civil action.

Compensatory damages

Compensatory damages, also called actual damages, are paid to compensate the claimant for loss, injury, or harm suffered by (see requirement of causation) another's breach of duty.

Quantum/measure of damages - breach of duty - contract

On a breach of contract by a defendant, a court generally awards the sum which would restore the injured party to the economic position that he or she expected from performance of the promise or promises (known as an "expectation measure" or "benefit-of-the-bargain" measure of damages).

When it is either not possible or desirable to award damages measured in that way, a court may award money damages designed to restore the injured party to the economic position that he or she had 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).

Parties may contract for liquidated damages to be paid upon a breach of the contract by one of the parties. Under common law, a liquidated damages clause will not be enforced if the purpose of the term is solely to punish a breach (in this case it is termed penal damages). The clause will be enforceable if it involves a genuine attempt to quantify a loss in advance and is a good faith estimate of economic loss. Courts have ruled as excessive and invalidated damages which the parties contracted as liquidated, but which the court nonetheless found to be penal.

Quantum/measure of damages Breach of duty tort

Damages in tort are generally awarded to place the claimant in the position he/she would have been had the tort not taken place. Damages in tort are quantified under two headings: general damages and special damages.

General damages

General damages compensate the claimant for the non-monetary aspects of the specific harm suffered. This is usually termed 'pain, suffering and loss of amenity'. Examples of this include physical or emotional pain and suffering, loss of companionship, loss of consortium, disfigurement, loss of reputation, loss or impairment of mental or physical capacity, loss of enjoyment of life, etc. This is not easily quantifiable, and depends on the individual circumstances of the claimant. Judges in the United Kingdom base the award on damages awarded in similar previous cases. For example, an accident in which the claimant has suffered the loss of both legs and for which the defendant was legally responsible, will typically attract general damages (at 2006) in the region of £125,000 to 145,000. A list of these are contained in a reference book known as 'Kemp & Kemp'. 1