Which type of damages is awarded in a tort or breach of contract case to punish the guilty party for causing grievous harm?

Punitive damages are awarded in tort or breach of contract cases primarily to punish the wrongdoing party and deter them, and others, from engaging in similar conduct in the future. These damages go beyond simply compensating the injured party for their actual losses or harm; rather, they are intended to serve as a financial penalty for particularly egregious behavior that exhibits a disregard for the rights and well-being of others. This is crucial in legal contexts where a party has not only caused harm but has also acted with malice, fraud, or gross negligence.

In contrast, compensatory damages are aimed at making the injured party whole by covering their actual losses, nominal damages are a small monetary amount awarded when a legal wrong has occurred without substantial loss, and statutory damages are predefined amounts established by law for specific violations, regardless of the actual harm suffered. Thus, punitive damages specifically serve the purpose of providing a strong corrective measure against harmful actions rather than focusing solely on reparation or statutory frameworks.