Remedies

When one party breaches a contract, the other party may sue, and if so, has several remedies available to it. First, the party may seek monetary damages. If so:

In a breach of contract case, the measure of damages is the loss actually suffered by the breach. However, the non-breaching party is not entitled to be placed in a better position than he would have been if the contract had not been broken. Indeed, the non-breaching party, as a general rule, must mitigate his damages, and the breaching party has the burden to prove that the non-breaching party has not used reasonable diligence to mitigate its damages. Where a party does mitigate its damages, the breaching party is entitled to set-off the amount of damages mitigated.^[1]

Or, to put it another way:

The essential elements of any breach of contract claim are the existence of a contract, the defendant's breach thereof, and damages. The measure of damages for breach of contract is the loss actually suffered by the breach. Indeed, the plaintiff must show that its damages flowed directly and naturally from the breach. Damages may not be awarded based upon guess or speculation but must be ascertainable with reasonable certainty.^[2]

There is one concept here you should be familiar with, and that is mitigation of damages. This means, in essence, that a party who has been hurt by a breach of contract must attempt to lessen or eliminate damages by taking some other action. So, for instance, in a case where someone breaches an apartment lease:

The doctrine of mitigation of damages creates an obligation on the part of the landlord to use such diligence as would be exercised by a reasonably prudent man under similar circumstances to re-let the premises, if possible, in order to mitigate damages resulting from the tenant's breach of lease. The obligation exists even if there is no mandatory re-letting clause in the lease. Further, courts have recognized and enforced the doctrine of mitigation of damages while at the same time sustaining savings clauses.^[3]

The same holds true for other contracts. For instance, in a manufacturing contract, if the purchaser does not get needed parts, the purchaser must attempt to purchase those parts elsewhere. Conversely, if a purchaser refuses an order, the manufacturer must attempt to sell those parts elsewhere.

On the other hand, in certain situations, the injured party may seek specific performance; that it, the party may seek to force the other party to go through with the contract. Specific performance is known as an equitable remedy – that it, rather than awarding money damages, the court orders some other action to “make one party whole.” In other words, “specific performance is an equitable remedy, directing “the performance of a contract according to the precise terms agreed upon, or substantially in accordance therewith.”^[4] Specific performance will often be found as part of real estate suits, where one party seeks to force the other to consummate the sale. Therefore, Indiana courts have held that:

To be enforced by specific performance, a contract for the sale of real estate need only be reasonably definite and binding as to its material terms. Id. A party seeking specific performance of a real estate contract must prove that the contract obligations of that party have been substantially performed or that an offer to do so has been made.^[5]

A court may also order compensatory damages when ordering specific performance, if the party seeking performance has expended time and money in order to obtain it.

[1] Sheppard v. Stanich, 749 N.E.2d 609, 611-12 (Ind. App. 2001).

[2] Knitcraft Corp. v. Raleigh Ltd., Inc., 943 N.E.2d 446 (Ind. App. 2011

[3] Geller v. Kinney, 980 N.E.2d 390, 399 (Ind. App. 2012).

[4] Schuler v. Graf, 862 N.E.2d 708, 712 (Ind. App. 2007)

[5] Humphries v. Ables, 789 N.E.2d 1025, 1034 (Ind. App. 2003).