Which kind of damages is awarded to compensate the plaintiff for incurred losses?

Compensatory damages are designed to reimburse the plaintiff for actual losses incurred due to the actions of the defendant. This type of damage aims to restore the injured party to the position they would have been in had the harmful event not occurred. Compensatory damages can cover a variety of losses, including both economic damages, such as lost wages and medical expenses, and non-economic damages, such as pain and suffering.

In contrast, punitive damages are intended to punish the defendant for particularly egregious conduct and deter future wrongdoing rather than to compensate the plaintiff directly. Statutory damages are set by law and are awarded when actual damages are difficult to ascertain, serving as a fixed penalty. Liquidated damages are pre-determined amounts specified in a contract to be paid if one party fails to fulfill contractual obligations, which is also different from compensatory damages focused on actual loss.