NALA Certified Paralegal Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

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What distinguishes punitive damages from actual damages?

Punitive damages punish wrongdoing; actual damages compensate losses

Punitive damages are primarily intended to punish a wrongdoer for particularly egregious behavior and to deter others from committing similar acts in the future. They serve a societal interest in discouraging misconduct. On the other hand, actual damages, also known as compensatory damages, are designed to compensate the injured party for losses suffered due to the defendant's actions. This includes both tangible losses such as medical expenses and lost wages as well as intangible losses such as pain and suffering.

Understanding this distinction is critical in legal contexts, as the nature of the damages sought can influence litigation strategies, potential settlements, and overall case outcomes.

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Actual damages are more costly than punitive damages

Punitive damages are awarded in class actions

Actual damages are only awarded in criminal cases

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