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How Much Can You Recover for a Contract Breach?

A contract is a legal agreement ensuring an offer and the acceptance of the parties involved. All the parties involved have to recover for a Contract Breach and adhere to it at any cost. If any one of the parties breaches a contract they will be met with lawsuits.

A contract is a legal agreement entered into by two or more parties, indicative of their consent to perform their respective actions for some consideration for which the contract is made. Know more on process for Recover for a Contract Breach.

An ideal contract will have a promisor (the contracting party) proposing a certain action to the promise, which is the intent to do or abstain from doing a certain act. The contract is complete when the promise grants assent to such an act.

The promise in turn agrees to pay a consideration or agrees to do or abstain from doing a certain act as a consideration for the promisor’s act. The other parties, who suffer the consequences, would want to be compensated for the losses and would therefore sue the defaulting parties for the breach of contract.

Once the contract is formed, it has to follow the basic framework as stipulated by law. The Indian Contract Act of 1872 lays out the key points which have to be abided by the parties while signing the contract. Additionally, the Act delineates the particulars that have to be adhered to when there is a breach of contract by the parties involved.

When there is a contract, the most obvious outcome is the performance of the contract. Unfortunately, the situation may not be ideal round the clock and, under such circumstances, a breach of contract ensues. The Act, therefore, answers the most pertinent question of what action can possibly be pursued when such a breach of contract happens.

Monetary Remedies Available When There Is a Breach of Contract

The most preferred and obvious form of compensation for the breach of contracts is monetary compensation. The monetary remedies can be categorised as listed below:

Compensatory Damages:

Compensatory damage is the most conventional form of remedy. Here it might be interesting to note the difference between the words’ damage ‘and’ damage ’. In legal parlance, while “damage” refers to the loss or injury meted out, “damages” refer to monetary or other forms of compensation given to the aggrieved party.

When compensatory damages are sought, the party that breached the contract has to pay the aggrieved party a sum that is proportional to the losses that occurred due to the breach of the contract. For instance, if a person strikes a contract with another party to service a vehicle, let’s say, it would cost a sum of 100.

Suppose the party that accepted to perform the service forfeits the contract, and the other party finds a third party who would perform the same service at 150, which is the cheapest possible under the given circumstances, then the party that breached the contract owes the aggrieved party 150 in the case of compensatory damages.


In the case of restitution, when a contract is not performed, the party that failed to perform the contract is required to pay compensation to the aggrieved party. Considering the above-stated example, the party that breached the contract is required to pay 100 since that was the amount the party received initially.

Punitive Measures:

Here, the sum of money sued is intended to act as a punishment for the party that has breached the contract. Most often, this is adopted in cases where there is moral guilt on behalf of the party that has breached the contract. For instance, when a manufacturer intentionally sells hazardous substances, punitive measures will be taken. GET LEGAL HELP!

Nominal Measures:

The Court often resorts to nominal damages when there is an actual breach of contract but the parties to the contract have neither suffered any harm in person nor suffered any material loss.

Liquidated Damages:

Liquidated damages are those which are paid by the parties in the event of a breach of contract. The contract often specifies the amount to be paid in case of a breach of contract, and hence the amount to be sued for is quite up-front in this case.

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Quantum Meruit:

This is based on equitable compensation meted out for partial performance. In a contract, most often the work and the compensation or performance of the parties involved in general are quantified. But this is not always feasible, as not every genre of action is quantifiable. Under such circumstances, the concept of quantum meruit is employed to recover the compensation for the performance of the contract where a fixed price has not been agreed.

The Latin term “quantum meruit” means “as much as it deserves” and is often employed in matters relating to equitable compensation or restitution.

Considering the example cited previously, if the contract mentions a service charge of 100 for servicing a vehicle but the servicing party performs almost half of it and later abandons the vehicle, the party can demand a sum of 50 for having done half of the service, though the price is not explicitly mentioned in the contract.


Apart from suing for the breach of contract, the aggrieved party can also opt for a recession of the contract. When one of the parties fails to pay heed to the contractual obligations and fails to perform the promised action, the other party or parties to the contract can opt to rescind the contract and can forthrightly refuse to perform their part of the obligations. You can get in touch with our experts at Vakilsearch for legal advices. 

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