Damages

Damages are a core legal remedy in international trade contracts, referring to monetary compensation paid by one party to the aggrieved party for losses caused by breach of contract or tort, as stipulated by law or agreement. They are widely used in scenarios including delayed delivery by the seller, non-conforming goods, refusal by the buyer to pay, and unilateral termination of contract. Precautions: First, damages are based on the principle of compensating actual losses and are generally not punitive (unless the contract stipulates punitive liquidated damages); second, the aggrieved party has a duty to mitigate losses, and losses that could have been avoided by reasonable measures may not be recoverable; third, the scope of compensation generally includes direct losses and foreseeable indirect losses, but mental distress is usually not applicable in international sales of goods; fourth, damages may be combined with remedies such as termination and specific performance, but double recovery is not allowed. Distinction from other terms: Damages differ from liquidated damages, which are a fixed sum pre-agreed in the contract without proof of actual loss; they also differ from a penalty, which may be adjusted by a court if excessive. Trade practitioners should specify in the contract the calculation method, cap, and governing law for damages to reduce dispute risks.