What are damages in a legal context?

In the legal context, damages refer specifically to monetary compensation awarded to an individual for losses they have suffered due to the wrongful conduct of another party. This can encompass various types of harm, including physical injuries, emotional distress, property damage, and financial losses. The purpose of awarding damages is to restore the injured party, as closely as possible, to the position they would have been in had the harmful event not occurred.

Monetary compensation can be classified into several categories, such as compensatory damages, which are intended to cover direct losses, and punitive damages, which are awarded to punish the wrongdoer and deter future misconduct. The key concept is that damages are fundamentally about compensation for harm rather than other legal mechanisms or processes, such as enforcement or resolution of disputes. Thus, the focus on financial restitution makes this choice the correct understanding of what damages are in a legal setting.