Business Senior Practice Exam 2026 – 400 Free Practice Questions to Pass the Exam

Compensatory damages are designed specifically to cover quantifiable losses that a party has suffered as a result of another party's actions. These losses can include medical expenses, lost wages, property damage, and any other measurable economic impacts. The goal of compensatory damages is to make the injured party "whole" again, which means restoring them as closely as possible to their financial position prior to the incident that caused the loss.

Quantifiable losses contrast with damages such as pain and suffering, which are more subjective and harder to measure since they pertain to non-economic losses like emotional distress or physical pain. General damages cover non-quantifiable losses as well, while punitive damages are intended to punish the wrongdoer and deter future misconduct rather than compensate the victim for specific losses. Thus, compensatory damages are the correct choice for covering quantifiable losses, as they are calculated based on actual financial detriment suffered by the claimant.