Compensatory damages replace what was lost because of what the breaching party did and for this reason are often said to make the person whole.

True

Explanation:

Usually compensatory damages are assigned as a measure of the difference between the promised performance of a contract and the actual performance of the contract.

For example, I sign a contract to buy a brand new Honda Civic but the dealer sends me a used car. I can sue the dealer for compensatory damages because he didn't perform correctly, but the court will not assign me $1 million, it will me assign the difference between the value of a new car and a used car plus some damages or costs incurred.

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