Which damages serve the purpose of reforming or deterring certain conduct?

Exemplary, or punitive, damages are specifically designed to reform or deter certain conduct that is considered particularly harmful or egregious. Unlike compensatory damages, which aim to reimburse the injured party for actual losses suffered, punitive damages go beyond simply compensating the victim. They are intended to punish the wrongdoer for their actions and send a message to both the wrongdoer and society that such conduct will not be tolerated.

This form of damages acts as a deterrent by imposing a financial penalty that is significant enough to discourage similar behavior in the future. The ultimate goal is to promote public policy interests by reducing the likelihood of future wrongdoing, thus enhancing overall societal safety and morality.

In contrast, other types of damages serve different functions. Nominal damages recognize that a legal wrong occurred even if no financial loss ensued, compensatory damages focus on compensation for actual losses and injuries, and liquidated damages are predetermined amounts specified in a contract for breach of that contract.