Which type of damages is designed to place an injured party in the position they would have been in if the contract was fully performed?

Compensatory damages are specifically intended to make the injured party whole by compensating for the loss incurred due to the breach of contract. When a contract is not fulfilled, the goal of compensatory damages is to cover the actual losses suffered and restore the party to the position they would have been in had the contract been fully performed. This type of damages takes into account both direct losses and any consequential losses that are a foreseeable result of the breach.

In contrast, punitive damages are meant to punish the breaching party and deter similar behavior in the future, rather than compensating the injured party. Incidental damages refer to expenses that are incurred as a direct result of the breach, such as costs related to finding a substitute performance, but do not encompass the full scope of losses. Nominal damages are typically awarded when a breach occurred but did not result in any significant financial loss to the injured party; their purpose is to recognize that a violation occurred, even if no actual damages are present. Thus, compensatory damages are the appropriate form of restitution aimed at restoring the harmed party to their rightful position following a breach of contract.