Remedies for the Breach of

Contract
Learning Outcome:
• Illustrating the meaning of Breach of contract
• Explaining the remedies for the Breach of
Contract.
 Breach of Contract
• It amounts to a broken promise to do or not to
do an act.
• It may be single, occurring at single point of
time or continuing breaches.
• It can be Actual Breach or Anticipatory Breach
 Remedies of Breach of Contract
• Rescind the contract and refuses further
performance of contract.
• Sue for damages
• Sue for specific performance
• Sue for an injunction to restrain the breach of
a negative term
• Sue for quantum meruit
 Rescind the contract and refuses
further performance of contract
• Under Sec. 65, when a party treats a contract as rescinded, it
makes itself liable to restore any benefits it received under
the contract to the party from whom such benefits were
received.
Ex.
P, a music teacher, contracts with B, a manager of a theatre, to
impart music training to his singers at his theatre for 2 nights in
every week during the next 2 months, and B engages to pay her
Rs. 1000 for each night’s performance. On the 6th night, P
willfully absents herself from the theatre.
Discuss: Can B rescinds the contract? Justify
 Consequences of Recession of the
contract
• In case of voidable contracts—Sec.64
When the person at whose option the contract
is voidable, rescinds the contract, the other
party thereto need not to perform his/her
contractual obligations
The party rescinding the contract have to
restore the benefits, if any.
 2. Sue for Damages (Sec. 73)
• Damage is the monetary compensation allowed by the
court to injured party.
• The party injured by the breach of contract can claim
for damages.
Ex.
X, a buyer, agreed to purchase a TV for Rs.50000, but Y,
the seller, failed to deliver it, normally, the buyer will be
forced to go and buy a TV elsewhere.
Discuss: If, in the meantime, the price of TV has gone up
by Rs.10000. What remedy the X will have against Y?
 Case: Hadley v. Baxendale
Plaintiffs operated a mill, which they were forced to shut down when the crank
shaft of their steam engine broke. They contacted the manufacturer of the
engine, W. Joyce & Co. (Joyce), and Joyce agreed to make a new shaft from
the pattern of the old one. Therefore, a servant of Plaintiffs went to the office
of Defendants, common carriers, to have the crank shaft taken to Joyce.
Plaintiffs’ servant told Defendants’ clerk that the mill was shut down and the
shaft must be sent immediately. The clerk informed Plaintiffs’ servant that if the
shaft were given to them by twelve o’clock any day, it would be delivered by
the next day. Plaintiffs took the shaft to Defendants the next day before noon.
Due to Defendants’ neglect, the delivery to Joyce was delayed, and Plaintiffs
did not receive the new shaft for several days after they should have received
it.
Issue. Are Defendants liable to Plaintiffs for damages suffered by Plaintiffs due
to lost profits?
 Held
Held. No. A non breaching party is entitled damages arising
naturally from the breach itself or those that are in the
reasonable contemplation of the parties at the time of
contracting. Here, while the breach by Defendants was the
actual cause of the lost profits of Plaintiffs, it cannot be said
that under ordinary circumstances such loss arises naturally
from this type of breach. There is a multitude of reasons for a
miller to send a crank shaft to a third party. Defendants had no
way of knowing that their breach would cause a longer
shutdown of the mill, resulting in lost profits. Further,
Plaintiffs never communicated the special circumstances to
Defendants, nor did Defendants know of the special
circumstances.
.
 Type of Damages
• Unliquidated damages
1. General or ordinary
2. special damages
3. Exemplary, or punitive, nominal
4. Damages for loss of reputation
5. Damages for inconvenience and discomfort
 Ordinary damages
P agreed to sell to Q’100 quintals of Kalyan
wheat at Rs.335 per quintal and the price was to
be paid at the time of delivery. The price of
wheat rose to Rs.350 per quintal and P refused
to sell the wheat.
Discuss: Q claim against P
 Special Damages
• Damages occur under some peculiar
circumstances.
Ex.
X delivered goods to railway admin. To be carried to
a place where an exhibition was being held and told
the goods clerk that if the goods did not reach the
destination on the stipulated date he would suffer a
special loss. The goods reached late.
Discuss: What X can claim
 Exemplary Damage
• The damages are awarded to punish the
defendant
• Eg. Breach of promise to marry, wrongful
dishonour of cheque by bank
 Nominal damages
• Where there has been an infringement of contractual
rights , but no actual loss has been suffered then
nominal damages are awarded.
Ex. P agreed to supply sleepers to the railway
administration. According to one of the term of the
contract, P was required to pay damages to railways on his
failure to supply whether the railways suffered loss or not.
P failed to supply the sleepers and railways did not suffer
any loss. A case was filed against P. the court disallowed
the suit.
 Damages for loss of Reputation
• These damages are not recoverable
• An exception is Banker which wrongfully
dishonour the customer’s cheque.
• In this case, the smaller the amount of cheque
is dishonoured, the larger the amount of
damages are awarded.-----Business man
• Nominal damages----Non Business man
 Damages of Inconvenience and
Discomfort
P, a surveyor told Q, a client that the house which Q is
buying is in good condition but in fact substantial works need to
be carried on it. This put considerable strain on Q’s marriage as
he has too live under those appalling conditions with her wife. Q
sued P. It was held that Q was entitled to recover an award for his
physical discomfort.
b. Liquidated Damages and Penalty
• P gave Q a bond for the repayment of Rs.1000
with interest at 12%, at end of 6 months, with
a stipulation that in case of default, the
interest will be payable at 75%, from the date
of default. Decide..
 3. Sue for Specific Performance
X, a party to a contract, paid for a delivery of
goods, but Y, the other party, did not ship them
properly. A specific performance decree might
require the goods to be properly delivered.
Cases where specific performance
is not granted:
• Where monetary compensation is an
adequate relief
• Where the court cannot supervise the
execution of the contract
• Where a contract is for personal service
• Where one party is minor
Cases where specific performance
is granted:
• Where actual damage cannot be determined
• If monetary compensation will not be
adequate
• Where the act to be done is in the
performance of trust
• Where, in general, it would be just and
equitable to do
 4. Injunction
• An injunction is an order of the court requiring
a person to refrain from doing some act which
has been the subject matter of contract.
• The power to grant injunction is discretionary.
• It may be granted temporarily or for an
indefinite period.
• It may be prohibitory or mandatory
 Cont..
• A landlord might bring an action against a tenant for
waste, in which the right to protect the landlord’s
interest in the ownership of the premises is at issue.
The landlord might apply to court for an injunction
against the tenant’s continuing harmful use of
property.
 5. Sue on Quantum Meruit
• It means “as much as earned or deserved” or
“as much as is merited”.
Eg.
A contractor was contracted to work on a school. The contractor
did some work but messes up part of the work (breach of
contract). The school suspended the construction work because
of the problem. The contractor was entitled to be paid for the
services he had already done for the school on the basis of
quantum meruit.
 MCQs
1. Anticipatory breach of contract arises when
the promisor refuses to perform his promise:
a) At the due date of performance
b) Before the time of performance arrives
c) After the due date of performance
d) Both a and c
2. Actual breach of contract arises when the
promisor refuses to perform his promise:
a) At the due date of performance
b) Before the time of performance arrives
c) After the due date of performance
d) Both a and c
3. Which of the following is not a kind of
damages that is generally awarded:
a) Special
b) Vindictive
c) Nominal
d) Personal
4. Exemplary damage cannot be awarded:
a) For breach of promise to marry
b) For breach of promise to divorce
c) Wrongful dishonour of cheque
d) Both a and c
5. In case of breach of contract, if the promisee
did not suffer any real damage, he can claim:
a) No damages
b) Exemplary
c) General
d) Nominal