Contract Glossary
Damages
Definition
Damages are the money a court awards you when someone breaches a contract. There are four main types: compensatory (your actual losses), consequential (the ripple effects), liquidated (pre-agreed amount), and punitive (punishment, rare in contract law).
In Practice
A supplier fails to deliver $20,000 worth of parts on time, and you lose a $150,000 contract with your biggest customer because of it. Your compensatory damages are $20,000 (what you paid for parts you didn't get). Your consequential damages could be $150,000 (the contract you lost). But here's the catch, many supplier contracts exclude consequential damages. If yours does, you're limited to recovering the $20,000.
Common in these contract types
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