Practice Quiz

CLEP Business Law

Category - US Legal System

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Compensatory damages are:
  1. Awarded in a civil action to indemnify a party for the actual damages caused by the unlawful act of the other party.
  2. Awarded in a civil action to a party in an amount determined by statute which does not necessarily correspond to the actual damages caused by the unlawful act of the other party.
  3. Awarded in a civil action to a party in excess of actual damages as a means to deter or punish the other party for an unlawful act.
  4. Awarded in a civil action to a party to cover expenses related to the loss or harm caused by the unlawful act of the other party.
  5. None of the above.
Explanation
Answer: A. Compensatory damages are awarded in a civil action to indemnify a party for the actual damages caused by the unlawful act of the other party. There are several other types of damages that may be awarded in a civil action, including punitive damages, statutory damages, and incidental damages. The type of damages awarded depends on the facts of the particular case.
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