Damage means compensation for the loss suffered by the aggrieved party in breach of contract, and it is a major point to note that the term damage is different from damage. There are five types of damage.

Difference between damages and damage:

Damages are not the plural term of Damage. Damage means legal loss or violation of a legal right, i.e. a violation of a legal right. And on the other hand, the loss means that it is an economic or monetary compensation in terms of money. That means-  

Damage: legal loss or violation of legal right.

Damages: compensation, compensation in term of money.

Kinds of Damages:

There are five kinds of damages:

  1. Ordinary Damages: This is also known as normal damage or substantial damage. Ordinary damages are damages that arise in the normal course of things from breach of contract. Simple damages “depend on the knowledge that the parties have”.
  2. Special Damages: special damages are awarded to the plaintiff in special circumstances for sustaining loss as a breach of contract. Special damages may be successfully claimed only when they “may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it”.
  3. Nominal damages: When an injured party has not suffered any loss due to a breach of contract, the damages they recover are nominal. Where small is, for example, a rupee or a percentage, they only accept that the plaintiff has improved his case and won.
  4. Exemplary damages: Exemplary damage is also known as positive or pipette or compensatory or retaliatory damage. These losses are allowed in case of wrongful banker breach of check or breach of marriage.
  5. Liquidated damages: If the parties determine the amount of the breach at the time of entering into the contract in the event of a breach, they are called “liquid damages”. For example, non-payment against promissory note.

Liquidated damages represent the amount, determined or determined by the parties in the contract, to be a reasonable and substantive pre-estimate of the potential loss that may be possible as a result of the breach. A penalty is named in the contract at the time of its formation, proportionate to the probability of loss resulting from the breach. The courts in India allow fair compensation only.