Prior to the nineteenth century, remedies at common law were the largely unregulated province of the jury. By contrast, current contract law offers substantial rules and principles to guide the award of damages for breach of contract. The basic principle is that damages should compensate the innocent party for moneys lost due to the breach. This compensatory principle is both the objective and the limit of contract damages: the courts should try to ensure that parties are compensated, but they also are to guard that damages do not go beyond compensation.

As is discussed here, compensation is also to be understood narrowly, with a handful of exceptions: innocent parties cannot recover punitive damages, damages for pain and suffering (emotional distress damages), or attorney's fees. Because of these restrictions on damages and others to be mentioned, innocent parties are almost assured of not being fully compensated for their losses.