Damages

From the Latin damages (Latin: "loss").

In one sentence

Money awarded by a court to compensate a party for losses caused by a breach or wrongdoing.

Plain English

Damages are the dollar amount a court orders someone to pay you when they've broken a contract or caused you harm. The idea is to put you back in the financial position you'd be in if the breach hadn't happened. There are different types of damages—some cover your direct losses, others cover indirect losses you suffered as a result, and some are meant to punish bad behavior. The court decides what's fair based on the facts of your case.

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Example

A seller fails to deliver promised goods, so the buyer has to buy them elsewhere at a higher price. The buyer sues and wins damages equal to the price difference plus the cost of finding a replacement seller.

Used in a sentence

“The jury awarded damages of $50,000 to compensate the plaintiff for the breach of contract.”

Related terms

Compensatory Damages

Money paid to reimburse a party for actual losses directly caused by a breach or wrongdoing.

Expectation Damages

Money awarded to put a party in the position they would have been in if the contract had been fully performed.

Consequential Damages

Money awarded for indirect losses that result from a breach but are not the direct consequence of it.

Remedy

A legal action or payment a court awards to fix a harm or enforce a right after a breach.

Mitigation of Damages

A duty to take reasonable steps to minimize losses caused by another party's breach.

Reliance Damages

Compensation for losses suffered by relying on a promise, even if no formal contract exists.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.