11.1.11 Damages are a type of damages that may be recoverable in the event of a breach of contract. These damages are also known as liquidated damages or penalty damages and are typically stated in the contract to be due to the non-breaching party if the breaching party fails to meet their contractual obligations. 11.1.11 Damages can come in two forms, compensatory damages and punitive damages. Compensatory damages are designed to make the non-breaching party whole again and the amount awarded is based on the actual losses incurred. Punitive damages, on the other hand, are intended to punish the breaching party and are not based on actual losses.