Compensation which may be recovered in the courts by a person who has suffered loss, damage, or injury, whether to person or property, through the unlawful act, omission, or negligence of another. compensatory damages - That amount that will compensate the injured party for injury sustained, and nothing more, to make good or replace the loss. punitive damages - Damages assessed as a punishment to the wrongdoer, or as an example to others, for outrageous conduct or gross, wanton negligence.