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Breach of Contract

Breach of Contract

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Published by: chirag28588 on May 02, 2012
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Breach of Contract

Introduction  Parties to a contract are expected to perform their respective promises.  If a party breaks his obligation which the contract imposes , there takes place ‘Breach of Contract’.  If the contract is unilateral , the only remedy available to the aggrieved party is to claim relief for the breach.  If the contract is bilateral , the aggrieved party has 2 remedies: 1.He can claim relief for breach 2. He can be absolved from further performance of the contract. Breach is of 2 types: 1. Actual Breach 2. Anticipatory Breach of contract.

one party fails / refuses to perform his obligation under the contract. at the time when performance is due . 2. During the Performance may be either  Express Repudiation (By word /Act)  Implied Repudiation ( Impossibility created by act of party to the contract) . one party fails or refuses to perform his obligation under the contract. At the time when performance is due: Actual Breach of contract occurs when . During the performance of the Contract: Actual Breach of contract also occurs when during the performance of the contract .Actual Breach of Contract  Actual Breach of contract : 1.

(Express anticipatory breach of contract) 2. By creating some impossibility: (Implied repudiation) The promisor may .Anticipatory Breach Of Contract  This happens when the party repudiates his liability / obligation under the contract before the time of performance arrives. make the performance of the promise impossible. The effect is the same as renouncement.  This could happen in any one of the following ways:  1. before the performance is due. before the time of performance arrives . (Implied anticipatory breach of contract) . By Renunciation (Express repudiation) When one party expresses his inability to perform or renounces his liabilities under the contract expressly .

Some of them are as follows: Suit for damages. 6. The word ‘damages’ means compensation in money which the aggrieved party is entitled to receive form the party who has committed such breach . Restitution He can also sue to declare that the contract is no longer binding on him. 3. (SRA) Suit for injunction (SRA) Claim for quantum meriut. (SRA) The Indian Contract Act deals only with remedy of damages. several remedies are available to the aggrieved party . 4.    .Remedies in case of Breach of Contract  1. 5. The fundamental principle underlying damages is not punishment but compensation. Bring an action for specific performance. In case of Breach of contract . 2.

In such cases special damages are awarded. Special Damages: This results from breach of contract under some special circumstances. Ordinary or General Damages.Compensation for Loss / Damage Types of Damages  Section 73 of the Indian Contract Act deals with compensation for the loss caused by breach of contract. even at the time of entering the contract.  Damages which the parties are deemed to have known as likely to arise on a breach . 2. .  Kinds of Damages: 1.

‘B’ . in turn .. who used it for feeding cattle. Vs Lewis & Peat Ltd. (1923) ‘P’ bought from ‘L’ some copra cake . in turn . Various buyers filed a suit against ‘P’ . sold it to farmers . The court held that ‘L’ was liable to pay damages. ‘P’ . . ‘P’ . demanded damages & costs from ‘L’. in turn sold the copra cake to ‘B’. and obtained damages. The Copra cake was poisonous & the cattle fed on it & died.Special Damages – Case Law  Pinnock Bros.

 Ex: In case of Breach of promise to marry  2. Exemplary Damages: This is intended to show the Court’s strong disapproval of the conduct of the defendant in committing the wrong. belonging to the person issuing the cheque.  Thus exemplary damages are also called vindictive or punitive damages.Kinds of Damages (Continued) 3. so a nominal damages of a small sum of money may be awarded. When the banker refuses to honor the cheque in spite of having sufficient funds with him . Nominal Damages: Here the breach involved may be only technical . . 4.

In Un liquidated damages . the sum has been fixed by the parties as a genuine pre-estimate of the damage likely to be caused by breach of the contract. .Kinds Of Damages (Continued)  Liquidated & Un liquidated Damages: Under Liquidated damages . no such sum has been fixed by the parties as a pre-estimate of the damage.

This is the way by which a contract may be discharged. . He is freed from all obligations under the contract.  Under Sec 64 . the party rescinding a voidable contract shall . if he has received any benefit there under from another party to such contract restore such benefit to the person from whom it was received.Remedies in case of Breach – Cancellation /rescission  Recession is the revocation of a contract. the other party may treat the contract as rescinded. When one of the parties to a contract commits breach.

Suit for specific Relief  Specific performance is directed only in certain cases where monetary compensation is not an adequate remedy & there exists no standard for ascertaining the actual damages caused by non –performance of the act. . 3 Where the contract is for personal service. This remedy is discretionary & will not be granted in the following cases. ex minor. 4 Where one of the parties is incompetent to contract. 2 Where the court cannot supervise the execution of the contract. 1 Where monetary compensation is an adequate remedy.

 Injunctions may be temporary or permanent. An aggrieved party can sue for an injunction . Ex : C .  Injunctions may be mandatory or prohibitory. an owner of a magazine engaged ‘P’ to write a book to be published in installments in his magazine .Suit for injunction  An injunction is a preventive relief . (Planche Vs Calburn) . It was held that ‘P’ could claim payment for the part already published. Right to Quantum Meruit means a right to claim the compensation for the work already done. the publication of the magazine was stopped . Suit for Quantum Meruit Quantum Meruit means as much as is earned. After a few installments were published .  An injunction is an order of the court restraining the wrongdoer from doing . or continuing . the wrongful act complained of.

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