What type of damages allows an injured party to seek monetary compensation for losses due to breach of contract?

In contract law, when an injured party seeks monetary compensation for losses resulting from a breach of contract, they are typically pursuing what are known as "compensatory damages." These damages aim to put the injured party in the position they would have been in had the contract been fulfilled.

Compensatory damages can generally be categorized into two types: direct (or general) damages, which cover the loss directly resulting from the breach, and consequential (or special) damages, which cover indirect losses stemming from the breach that were foreseeable at the time of contract formation.

Choosing the response that encompasses both direct and consequential damages illustrates the understanding that the injured party can claim for various types of losses incurred due to the breach. Thus, recognizing compensatory damages, including both categories, provides a more comprehensive view of the remedies available in contract law. This alignment with the concept of compensatory damages justifies the selection of the correct answer effectively, as it reflects the broad scope of potential recoverable losses in the event of a contract breach.