Which term refers to damages aimed at deterring future misconduct?

The term that refers to damages aimed at deterring future misconduct is punitive damages. These damages go beyond compensating the injured party for their loss; instead, they serve a broader purpose in the legal system. Punitive damages are awarded when the defendant's actions are found to be especially harmful, reckless, or intentional. This type of monetary compensation is intended to punish the wrongdoer and discourage both the defendant and others from engaging in similar or worse conduct in the future.

In contrast, compensatory damages are designed to reimburse a plaintiff for actual losses incurred, liquidated damages are pre-determined amounts specified in a contract for breach, and nominal damages are symbolic amounts awarded when a legal wrong has occurred but no actual financial loss was sustained. Each of these other forms of damages has its distinct purpose, but none are aimed at deterring future misconduct in the same way punitive damages are.