Section 37, para 1, of The Contract Act lays down that, "The parties to a contract must either perform,

or offer to perform. their respective promises, unless such performance is dispensed with or excused
under the provisions of this act, or of any other law”.

In this Case, according to the original contract Neymar had with Barcelona, he needed to refrain from
negotiating with any other clubs during the next one-year period (Up to August,2017) and needed to
pledge his loyalty to Barcelona.

Also, Section 62 of The Contract Act states that “If the parties to a contract agree to substitute a new
contract for it, or to rescind or alter it, the original contract need not be performed”

Since, Neymar’s contract with Barcelona ended when he joined PSG, this can be counted as an alteration
or substitution of Contract where a third party, naming PSG joined in the contract and thus Novation
took place. Novation occurs when a new contract is substituted for an existing contract, either
between the same parties or "between different parties.

Finally, Section 73 of ‘The Contract Act’ states that “When a contract has been broken, the party who
suffers by such breach is entitled to receive, from the party who has broken the contract,
compensation for any loss or damage caused to him thereby, which naturally arose in the usual course
of things from such breach, or which the parties knew, when they made the contract, to be likely to
result from the breach of it.”

Analysis:
Since Neymar failed to uphold his commitment of not negotiating with any other clubs in the mentioned
period as well as did not pledge his intention to finish out his contract at Barcelona, Barcelona got a legal
right to refuse Neymar his part of loyalty bonus. And according to Section 75, Barcelona has a legal case
that rescinds the original case and they are entitled to receive damages or compensation of the
damages caused by this scenario.

On his case, Neymar can argue that he has lived up to his part of the contract and he is entitled to the
amount specified to be paid within August 1, 2017. And he can further argue his activation of ‘buyout
clause’ by PSG is a termination of contract by mutual agreement.

Furthermore, Neymar can file a suit upon Quantum Meruit, stated under remedies of breach of
contract. Quantum meruit literally translates to “as much is earned”. At times when one party of the
contract is prevented from finishing his performance of the contract by the other party, he can claim
quantum meruit.

So, Neymar can claim that he must be paid a reasonable remuneration for the part of the contract he
has already performed. This could be the remuneration of the services he has provided or the value of
the work he has already done.