As a business owner in central Indiana, your word is your bond. You expect the same from your suppliers, clients, and partners. So, when someone fails to hold up their end of a deal, it’s a direct hit to your bottom line. You’re left trying to clean up a mess you didn’t make. It’s one of the most common types of business disputes in Indiana, and it can leave you wondering what, if anything, you can do about it.
When a broken contract lands you in a legal fight, the first question is always: “What can I actually get?” In Indiana, the legal system’s main goal in a breach of contract case is not to punish the other side, but to put you in the position you would have been in if the contract had been performed. This is often called getting the “benefit of the bargain.”
But what does that mean in real dollars and cents? The answer depends on the type of losses you’ve suffered. If you’re working with a business dispute attorney in Indianapolis, they will likely start by breaking your damages down into a few main categories.
Getting Back to Whole – Compensatory Damages
This is the most common type of damage. It’s the money intended to cover your direct, actual losses from the breach. Think of this as the “benefit of the bargain” we mentioned. Indiana courts look at what you were promised versus what you actually got.
Let’s use a practical example. Say you’re a builder in Carmel and you sign a contract with a supplier to buy 1,000 board feet of lumber for $5,000. They fail to deliver. Now, you have to scramble and buy the same lumber from a different supplier in Indianapolis, but they charge you $7,500. Your compensatory (or “actual”) damages are $2,500, the difference that makes you whole. These kinds of situations are at the heart of navigating contract disputes between businesses in Indiana.
What About the Ripple Effects and Clean-Up Costs?
Sometimes, the direct loss is only the beginning of the problem. A breach can cause a domino effect, creating other expenses and lost opportunities. Indiana law recognizes two other types of damages here.
Consequential Damages
These are the indirect, “ripple effect” losses. The most important thing to know about these damages is that they must have been foreseeable to both parties when you signed the contract. This is a high bar.
Using our lumber example: Let’s say the supplier knew you needed that lumber on that specific day to frame a house, and because of their delay, you had to pay your work crew for a day of standing around and also pay a $1,000 penalty to your client for missing a deadline. Those lost wages and penalty fees could be considered consequential damages because they were a foreseeable “consequence” of the supplier’s failure.
Incidental Damages
These are the reasonable “clean-up” costs you run into while trying to deal with the breach. Think of them as the extra expenses for managing the problem. For example, if you had to pay for extra shipping to get the replacement lumber, or fees to inspect the new (or rejected) goods, those costs could be incidental damages.
What if the Contract Already Spelled Out the Penalty?
You may have a clause in your contract called “liquidated damages.” This is a section where both parties agree, in advance, on a specific dollar amount to be paid if one side breaches the contract. These are common when it’s hard to predict what the actual damages would be.
But here’s a very important Indiana-specific point: Indiana courts will not enforce a liquidated damages clause if it’s really a penalty in disguise.
The amount in the contract must be a reasonable estimate of the actual losses you’d expect to suffer, not a giant number meant to punish the other side. If a court in Marion or Hamilton County looks at your clause and decides it’s “grossly disproportionate” to your actual harm, they will likely throw it out.
Can I Get Punitive Damages to Really Punish Them?
This is a question we get all the time, and the answer is almost always no. As we said, Indiana’s contract law is about making you whole, not punishing the other party.
There is a very narrow exception. Punitive damages are only available in Indiana if you can prove—by a high standard called “clear and convincing evidence”—that the other party’s breach wasn’t just a simple mistake or disagreement. You’d have to show their conduct was intentionally malicious, fraudulent, or reckless, and that it harmed more than just you (that it hurt the “public interest”). This is very rare in a typical business-to-business contract dispute.
Even if you do qualify, Indiana law caps most punitive damage awards at either three times the amount of your compensatory damages or $50,000, whichever is greater.
What About Non-Money Remedies?
Sometimes, money isn’t what you need. In very limited cases, a court can order an “equitable remedy.”
- Specific Performance –The court orders the breaching party to actually do what they promised. This is almost exclusively used in real estate deals or for one-of-a-kind items (like a unique piece of art), where money simply can’t replace what was lost.
- Injunction – The court orders a party to stop doing something, like violating a non-compete agreement.
You Don’t Have to Figure This Out Alone
As you can see, calculating what you’re owed is complicated. It’s not just about what you lost; it’s about what you can prove, what was foreseeable, and what Indiana law allows.
If your business in Indianapolis, Fishers, or the surrounding area is struggling with a broken contract, you don’t have to carry the weight yourself. A good Indianapolis commercial litigation attorney can help you assess your losses, understand your options, and fight to get you the “benefit of the bargain” you were promised.
At Fugate Gangstad Lowe, we help small business owners navigate these exact problems. Give our office a call at 317-829-6797 or fill out our online contact form to set up a time to talk.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-clien