(law) A legal remedy for a breach of contract by which the parties are restored to their original positions before the contract was made or the breach occurred. Damages are distinguished from restitution in that damages compensate for a party who has suffered a loss. If a buyer, for example, partially pays for merchandise in advance and the seller delivers merchandise that fails to meet the buyer’s specifications, the buyer may file a legal action seeking restitution, that is, a return of the advance payment to the buyer and of the goods to the seller. Alternatively, the buyer may accept the goods and may sue for damages in the amount by which the worth of the goods is less than the original contract price.

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