Len contracts to work for Media Corporation during May for $4,500. On April 30, Media cancels the contract. Len declines a similar job with New Ads Inc., which would have paid $3,500. Len files a suit against Media. As compensatory damages, Len can recover:. a. $4,500.
b. $3,500.
c. $1,000.
d. $0.

The correct answer is:

$3,500 (b.)

Explanation:

Compensatory damages are money paid to the plaintiff, to pay for losses incurred, injury or damages by negligence or unlawful conduct of the defendant in a civil court case. Before these compensations can be paid, the plaintiff has to prove in amount, the losses incurred and that these losses are directly related to the activity of the other party. Since the amount lost due to the choosing of the failed contract is $3,500, the plaintiff can file a suit for the compensation of the same amount.

On another hand, punitive damage may be compensation that is over and above the losses incurred by the plaintiff, and this is aimed mainly to provide an incentive against the repetition of such acts that caused the plaintiff such losses.