Compensatory Damages Legal Meaning and Definition

Here is a simplified definition of the legal term Compensatory Damages.

Compensatory Damages (noun): Monetary awards given to a person who has suffered loss, damage, or injury, either to their person or property. This type of damage is measurable and must be proven in court. It's intended to restore the injured party to the financial position they had before the damage occurred, rather than to punish the defendant. It differs from punitive damages, which are awarded to deter others from committing similar actions.