what are the types of damages in the legal context 
there are three general types of compensatory damages that the plaintiff can seek and which may be awarded by a court the bottom linea liquidated damages clause is fairly common in contracts when one party has concerns about the possibility of losses caused by errors or misjudgments by the other party these losses are by their nature difficult to estimate they may be related to loss of potential sales loss of reputation or loss of competitive edge in any case the number attached to a liquidated damages clause creates a shared understanding between the parties to a contract of the value of meeting the contract terms 