Remedies Legal Terms Glossary
Explore definitions, related concepts, and supporting case briefs.
Definitions
Compensatory Damages
Compensatory damages are monetary awards intended to make the injured party whole by restoring them to the position they would have occupied had the wrong not occurred. They encompass both general damages (those flowing naturally from the breach or tort, such as pain and suffering) and special damages (those arising from the particular circumstances of the case, such as lost wages or medical expenses). The plaintiff bears the burden of proving compensatory damages with reasonable certainty, and speculative or conjectural losses are not recoverable. In Hawkins v. McGee, the court distinguished between compensatory measures by awarding the difference between the value of the hand as promised and the value of the hand as it was after the failed surgery.
Consequential Damages
Consequential damages (also called special or indirect damages) compensate for losses that do not flow directly from the breach itself but rather from the special circumstances of the injured party. Under the rule established in Hadley v. Baxendale, consequential damages are recoverable only if the breaching party knew or had reason to know of the special circumstances giving rise to the loss at the time of contracting. This foreseeability limitation serves as a critical check on liability, preventing parties from being exposed to unlimited and unknowable risk. The injured party must also prove consequential damages with reasonable certainty and must take reasonable steps to mitigate them.
Expectation Damages
Expectation damages, the default remedy for breach of contract, aim to put the non-breaching party in the position they would have been in had the contract been fully performed. The standard formula is the value of the promised performance minus the cost saved by not having to perform, plus any incidental and consequential damages. This measure protects the party's expectation interest, or their anticipated benefit of the bargain. Hawkins v. McGee is the canonical case, where the court held that the plaintiff was entitled to the difference between the value of a perfect hand (as promised) and the value of the hand post-surgery, rather than merely a refund of what was paid.
Reliance Damages
Reliance damages restore the injured party to the position they occupied before the contract was made by compensating for expenditures and losses incurred in reasonable reliance on the breaching party's promise. Unlike expectation damages, reliance damages do not compensate for lost profits but instead reimburse out-of-pocket costs. Courts often award reliance damages when expectation damages are too speculative to calculate with reasonable certainty, as illustrated in Anglia Television Ltd v. Reed, where pre-contract production expenditures were recovered because lost profits from the unmade television production were impossible to prove. Reliance damages are also the typical measure in promissory estoppel claims under Restatement (Second) of Contracts Section 90.
Restitution Damages
Restitution damages are measured by the value of the benefit conferred upon the breaching party, with the goal of preventing unjust enrichment rather than compensating the plaintiff's loss. This remedy differs from expectation and reliance damages because it focuses on the defendant's gain rather than the plaintiff's loss. Restitution may be elected as an alternative to expectation damages when the contract price undervalues the benefit conferred, and it is the primary remedy in quasi-contract and unjust enrichment claims where no valid contract exists. The benefit is typically measured either by the reasonable market value of the services rendered or by the extent to which the defendant's property was increased in value.
Punitive Damages
Punitive damages (also called exemplary damages) are awarded not to compensate the plaintiff but to punish the defendant for particularly egregious, malicious, or willful conduct and to deter similar future behavior. In contract law, punitive damages are generally unavailable because contract remedies aim to compensate rather than punish; however, they may be awarded when the breach also constitutes an independent tort accompanied by fraud, malice, or oppression. The Supreme Court in BMW of North America v. Gore established constitutional guideposts limiting punitive damages, including the degree of reprehensibility, the ratio between punitive and compensatory damages, and comparable civil penalties. Most jurisdictions require clear and convincing evidence to support a punitive damages award.
Nominal Damages
Nominal damages are a small, symbolic monetary award (often one dollar) granted when the court recognizes that a legal right has been violated but the plaintiff has failed to prove any actual loss or cannot quantify damages. They serve the important function of vindicating the plaintiff's rights and establishing that a breach occurred, which can be critical for preserving claims or establishing precedent. Nominal damages are commonly awarded in breach of contract cases where the breach is technical but harmless, or in tort cases involving trespass or violations of constitutional rights. A judgment for nominal damages also allows the prevailing party to recover costs and, in some contexts, attorneys' fees.
Specific Performance (Remedies)
Specific performance is an equitable remedy that compels the breaching party to perform their obligations under the contract as originally promised. It is available only when monetary damages would be inadequate to compensate the injured party, most commonly in transactions involving unique goods (such as real property, rare artwork, or closely held stock) where no substitute performance exists on the open market. The party seeking specific performance must demonstrate clean hands, meaning they must not have acted inequitably, and the contract terms must be sufficiently definite for a court to enforce. Courts retain discretion to deny specific performance when enforcement would impose undue hardship on the breaching party or when supervision of performance would be impractical.
Injunction (Temporary)
A temporary (or preliminary) injunction is an equitable remedy issued during the pendency of litigation to preserve the status quo and prevent irreparable harm before a full trial on the merits. Under the standard articulated in Winter v. Natural Resources Defense Council, the movant must demonstrate: (1) a likelihood of success on the merits, (2) a likelihood of irreparable harm absent the injunction, (3) that the balance of equities tips in their favor, and (4) that the injunction is in the public interest. Because a preliminary injunction is an extraordinary remedy, courts often require the movant to post a bond to cover potential damages to the enjoined party if the injunction is later found to have been improvidently granted. Temporary injunctions remain in effect until the case is resolved or the court modifies the order.
Injunction (Permanent)
A permanent injunction is an equitable remedy issued after a full adjudication on the merits that orders a party to do or refrain from doing a specific act for an indefinite duration. To obtain a permanent injunction, the plaintiff must prove: (1) actual success on the merits, (2) that irreparable injury will result without the injunction, (3) that the remedy at law (money damages) is inadequate, and (4) that the balance of hardships and the public interest favor the injunction. In Boomer v. Atlantic Cement Co., the court famously declined to issue a permanent injunction against a polluting cement plant, instead conditioning the injunction on the defendant's failure to pay permanent damages, illustrating how courts weigh economic hardship in fashioning equitable relief.
Temporary Restraining Order
A temporary restraining order (TRO) is an emergency equitable remedy of very short duration, typically lasting no more than 14 days under federal rules, designed to prevent immediate and irreparable harm before a hearing on a preliminary injunction can be held. Unlike a preliminary injunction, a TRO may be granted ex parte (without notice to the opposing party) when the movant demonstrates that immediate and irreparable injury will result before the adverse party can be heard. The movant must show substantially the same factors as for a preliminary injunction, including likelihood of success on the merits and irreparable harm, and must typically post a security bond. Because TROs are issued on an emergency basis with limited process, courts construe the requirements strictly and treat them as exceptional relief.
Declaratory Judgment
A declaratory judgment is a judicial determination of the rights, duties, or obligations of the parties under a contract, statute, or other legal instrument, without ordering any specific performance or awarding damages. Authorized by the federal Declaratory Judgment Act (28 U.S.C. Sections 2201-2202) and analogous state statutes, this remedy allows parties to resolve legal uncertainties before a breach or injury occurs. Courts have discretion to grant or deny declaratory relief and will typically do so only when there is an actual controversy ripe for adjudication. A declaratory judgment can serve as the predicate for subsequent coercive relief, such as an injunction or damages, if the declared rights are later violated.
Rescission
Rescission is an equitable remedy that unwinds a contract ab initio, treating it as though it never existed and restoring both parties to their pre-contractual positions. It is available when a contract was induced by fraud, mutual mistake, duress, undue influence, or material misrepresentation, or when one party has committed a material breach. Upon rescission, each party must return any benefits received under the contract, a requirement known as restitutio in integrum. Rescission may be effected by mutual agreement of the parties, by a unilateral declaration of the injured party (subject to judicial confirmation), or by court order. A party seeking rescission must act promptly upon discovering the grounds for avoidance, as undue delay may constitute ratification of the contract.
Reformation
Reformation is an equitable remedy by which a court rewrites or corrects a written instrument to reflect the true agreement of the parties when the document as drafted fails to do so due to mutual mistake or, in some cases, unilateral mistake coupled with fraud or inequitable conduct by the other party. Unlike rescission, which voids the contract entirely, reformation preserves the contractual relationship while correcting the error. The party seeking reformation must prove the original agreement and the mistake by clear and convincing evidence, a higher standard than the preponderance standard typical in civil cases. Reformation is not available merely because one party made a bad bargain; it requires proof that the writing diverges from what both parties actually intended.
Constructive Trust
A constructive trust is an equitable remedy imposed by operation of law to prevent unjust enrichment when a party has obtained legal title to property through fraud, breach of fiduciary duty, mistake, undue influence, or other inequitable conduct. Unlike an express trust created by agreement, a constructive trust is a judicial fiction: the court declares the wrongful holder a trustee who must convey the property to the rightful owner. The remedy is particularly powerful because it gives the beneficiary a proprietary interest in the specific property rather than merely a personal claim for money damages, which matters greatly in bankruptcy where secured and proprietary interests take priority over unsecured claims. Courts require the plaintiff to trace the property or its proceeds to the defendant's hands with reasonable certainty.
Equitable Lien
An equitable lien is a court-imposed security interest on specific property to prevent unjust enrichment, giving the plaintiff a charge against the property rather than ownership of it. Unlike a constructive trust, which transfers title to the plaintiff, an equitable lien merely secures the plaintiff's monetary claim against the property, effectively making the plaintiff a secured creditor. This distinction matters practically: if the property has appreciated in value, the plaintiff benefits more from a constructive trust (which conveys the property itself), whereas if the property has depreciated, an equitable lien capped at the amount owed may be more favorable. An equitable lien can be imposed on property that the defendant acquired through wrongful use of the plaintiff's funds, even if the property has been commingled with the defendant's own assets, provided the plaintiff can trace the contribution.
Accounting of Profits
An accounting of profits is an equitable remedy that requires the defendant to disgorge all profits earned through wrongful conduct, such as breach of fiduciary duty, infringement of intellectual property, or misappropriation of trade secrets. The remedy shifts the focus from the plaintiff's loss to the defendant's gain, and it is particularly appropriate when the plaintiff's actual damages are difficult to quantify but the defendant has clearly profited from the wrong. The plaintiff typically need only prove the defendant's gross revenues attributable to the wrongful conduct; the burden then shifts to the defendant to prove any deductible expenses or costs. An accounting of profits is closely related to disgorgement and is frequently invoked in partnership disputes, trustee breaches, and intellectual property cases.
Unjust Enrichment (Remedies)
Unjust enrichment as a remedial theory allows a plaintiff to recover the value of a benefit conferred on the defendant when it would be inequitable for the defendant to retain that benefit without payment. The plaintiff must establish three elements: (1) the plaintiff conferred a benefit on the defendant, (2) the defendant appreciated or had knowledge of the benefit, and (3) the defendant's retention of the benefit without compensation would be unjust. Unjust enrichment operates as the substantive basis for restitutionary remedies, including quasi-contract, constructive trust, and equitable lien, and it is available even in the absence of a valid contract between the parties. The measure of recovery is typically the reasonable value of the benefit to the defendant, not the cost to the plaintiff of providing it.
Quasi-Contract (Remedies)
A quasi-contract (or contract implied in law) is not a true contract but a legal fiction imposed by courts to provide a restitutionary remedy where no enforceable agreement exists, in order to prevent unjust enrichment. Courts will impose a quasi-contractual obligation when one party has conferred a benefit on another under circumstances where the recipient should reasonably expect to pay for it, and retention without payment would be unjust. The measure of recovery in quasi-contract is quantum meruit (the reasonable value of services rendered) or quantum valebant (the reasonable value of goods provided), not the contract price, since by definition no valid contract governs. Quasi-contract is particularly important as a fallback remedy when a contract fails for indefiniteness, lack of consideration, or Statute of Frauds defenses.
Disgorgement
Disgorgement is a restitutionary remedy that strips the wrongdoer of all gains or profits obtained through unlawful or inequitable conduct, regardless of whether the plaintiff suffered a corresponding loss. It serves a dual purpose: preventing unjust enrichment and deterring wrongful behavior by ensuring that misconduct is never profitable. The Supreme Court in Liu v. SEC (2020) confirmed that disgorgement in securities enforcement is a form of equitable relief limited to the wrongdoer's net profits (after deducting legitimate expenses) and must be awarded for the benefit of victims. Disgorgement is available in cases involving breach of fiduciary duty, fraud, securities violations, and other contexts where the defendant's gain exceeds the plaintiff's provable loss, making it a more potent remedy than compensatory damages alone.