VanEd National Real Estate Practice Exam

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What is the term for the $100,000 payment ordered by a court for excess damages in a breach of contract case?

Restitution damages

Compensatory damages

Punitive damages

The term for the $100,000 payment ordered by a court for excess damages in a breach of contract case is punitive damages. Punitive damages are awarded not to compensate the injured party for their actual loss, but rather to punish the breaching party for particularly egregious or reckless behavior and to deter similar conduct in the future. These damages go beyond mere compensation and are intended to serve as a form of legal punishment.

Compensatory damages, on the other hand, are designed to compensate the plaintiff for direct losses incurred due to the breach of contract. Restitution damages aim to restore the injured party to the position they were in prior to the contract, and liquidated damages refer to specified amounts in a contract that are agreed upon ahead of time as compensation for a breach. Thus, punitive damages uniquely serve a different purpose by adding a punitive element to the damages awarded.

Liquidated damages

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