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In contract and tort law, courts award damages to a plaintiff to compensate the civil wrong committed to him/her by the defendant. In contract law, damages amount to the loss incurred because of breach of a contract by a defendant. However, in tort law, damages are more difficult to assess. Damages are calculated by representing in economic terms a plaintiff’s loss or injury to property, person, and quality of life[i].

The purpose of damages is to restore an injured party to the position the party was in before being harmed. The nature and extent of the harm, and substantial evidence produced by plaintiffs are taken into consideration by the jury before awarding damages. Damages are divided into different categories based on the type of recovery such as:

Compensatory damages: This type of damages provides a plaintiff with an amount that is necessary to replace a loss or compensate an injury. Compensatory damages are issued only to the limit of loss and not more.
Future damages: This type of damages is provided only when there is a reasonable apprehension of a loss or injury in the future because of a negligent or malicious act or omission of a defendant. However, there should be a satisfactory basis to award future damages.

Incidental damages: Incidental damages are awarded to a plaintiff when certain expenses that are incidental to the loss or damage. The expenses should be incidental to the loss and should be reasonable.

Punitive damages: This category of damages is awarded against a wrong-doer for his/her negligent, malicious act, or omission that causes grievous damage to another. Punitive damages also act as a deterrent to others who tend to act in a similar manner. The amount of punitive damages to be awarded lies within the discretion of the jury or judge based on the extent of plaintiff’s injury and the wrong-doer’s behavior.

Nominal damages are awarded to an individual in an action when the individual suffers no substantial injury or loss that is to be compensated. In such actions a plaintiff’s rights are violated by a defendant’s wrongful conduct or breach of a legal duty[ii]. However, when the nature and extent of the injury is minimum, nominal damages are only awarded.

Temperate damages or moderate damages are more than nominal damages. For awarding temperate damages, courts should be convinced that there was a breach of legal duty by the defendant, but when the loss suffered by the plaintiff cannot be deduced with clarity[iii].

Compensatory damages are paid to a plaintiff to compensate for the loss and injury incurred. General damages compensate a claimant for the non-monetary aspects of the specific harm suffered[iv]. This is usually termed pain, suffering, loss of consortium, loss of earning, mental anguish, and loss of amenity. Mostly, general damages are awarded to individuals in actions for compensation in personal injury. Special damages are awarded to claimants for compensating monetary loss[v]. Such damages are provided in personal and commercial actions. The loss of irreplaceable items, car rentals, medical expenses and repair or replacement of damaged property are included under special damage.

Compensatory damages are awarded to claimants when there is a breach of contract and there is substantial evidence of the breach. A jury considers the economic losses due to loss of future profits and loss of opportunity suffered by the plaintiff before awarding damages. The assets of the defendant are also taken into consideration by the jury before calculating the amount to be awarded as compensation.

In tort cases, compensatory damages can be awarded in personal injury cases and when there is injury to personal rights and property rights. The measure of compensatory damages must be real and tangible. However, fixing an amount as damages is not an easy task for the jury when damages are sought for emotional distress and pain and suffering.

A plaintiff can recover for a number of different injuries suffered as a result of another person’s wrongful conduct. Compensatory damages can be awarded for cost of medical expenses and treatment, cost of living with a disability, loss of wages and earning capacity[vi], cost of replacement or repair of property, funeral expenses, pain and suffering resulting from an injury[vii], loss of consortium of spouse or parents[viii], mental anguish[ix], emotional distress, loss of enjoyment of life, loss of opportunity, and physical disablement and deformity.

A jury takes into consideration certain factors before awarding damages in contract and tort actions. In tort actions, the victim’s age, earning capacity prior to the accident, mental and physical health, habits, nature and extent of the injuries, suffering of the victim and the period of suffering, loss of income, impact of the injury on victim’s life style are all considered by the decision makers before calculating the compensation for personal injuries in economical terms[x]. However, in contract and tort cases, the jury depends on the substantial evidence provided by a plaintiff on the loss suffered by the plaintiff because of the injury caused by defendant’s negligence or breach of legal duty[xi].