Which term describes damages intended to compensate for actual loss?

• A. Nominal
• B. Compensatory
• C. Liquidated
• D. Punitive

Answer: (B)

Compensatory damages are the amount awarded to make the plaintiff whole by reimbursing actual losses suffered due to a breach or injury. They cover concrete costs like medical bills, lost wages, and property repair, and they can also include non-economic losses such as pain and suffering where recoverable. The goal is to restore the harmed party to the position they would have been in if the wrong had not occurred, not to punish the wrongdoer. Other types don’t fit: nominal damages are a small sum when a violation occurs but no actual loss is proven; punitive damages are meant to punish especially wrongful conduct; and liquidated damages are a pre-agreed amount in a contract, chosen in anticipation of breach rather than tied to actual loss.