What are nominal damages intended to address?

Nominal damages are a legal concept used in tort and contract law to recognize a violation of rights where no significant monetary loss has occurred. In instances where a plaintiff has suffered minimal or no actual damages, the law permits a court to award a small sum, establishing that a legal wrong has been committed even without evidence of substantial harm. This serves several functions, such as affirming the validity of the claim and signaling that while the breach may not have resulted in a quantifiable loss, the violation of rights still merits legal acknowledgment.

For instance, if a party fails to fulfill a contractual obligation but the other party has not suffered any real economic loss as a result, the court may still award nominal damages to signify that a breach occurred. This can help reinforce the principle that all parties are expected to uphold their contractual duties and that breaches will not go unnoticed, even if the financial impact is negligible.

In contrast, options that mention significant financial loss, future profits, or noneconomic damages like mental distress relate to situations where a party has experienced actual harm, which typically warrants compensatory or punitive damages rather than nominal ones. Therefore, the correct answer effectively captures the essence of nominal damages as aimed at addressing minimal or no losses suffered.