Remedies for Breach of

Contract

BBA 201 BL 9/7/2018

 Introduction of Remedy
 Types of Remedies for breach of contract

BBA 201 BL 9/7/2018

 A legal remedy is a court order that seeks to uphold a person‟s
rights or to redress a breach of the law.

BBA 201 BL 9/7/2018

SUIT FOR RESCISSION

SUIT FOR DAMAGES

SUIT FOR QUANTUM MERUIT

SUIT FOR SPECIFIC PERFORMANCE

SUIT FOR AN INJUNCTION

BBA 201 BL 9/7/2018

 The term Rescission refers to the cancellation of contract.

 If one party has broken his contractual relations, the other

party may treat the breach as discharge and refuse to perform
his part of performance.

 Thus in case of rescission of contract, the aggrieved or injured

party is discharged from all his obligations of the contract.

BBA 201 BL 9/7/2018

 'A' contracts to supply 10kg of potato for Rs. 8,000 to 'B'
on 15 June. If 'A' does not supply the potato on the
appointed day, 'B' need not pay the price. 'B' may treat the
contract as rescinded and may sit quietly at home. 'B' may
also file a „suit for rescission‟ and claim damages

 A promises B to supply 10 Bags of cement on a certain

day. B agrees to pay the price after the receipt of the goods.
A does not supply the goods. B is discharged from liability
to pay the price

BBA 201 BL 9/7/2018

 Monetary compensation allowed to the injured party
for the loss or injury suffered by him as a result of the
breach of contract.

 The fundamental principle underlying damages is not

punishment but to compensate the aggrieved party for
the loss suffered by him in the original position as he
would have been.

BBA 201 BL 9/7/2018

 Mr. Robin contracts to pay 3 lac to Mr. Peter on 1st April. Mr.
Robin does not pay the money on that day. Mr. Peter is unable
to pay her debts and suffer a loss. Mr. Robin is liable to pay
Mr Peter principal amount and also interest on it

 If the machinery of any factory arrives late and due to this

reason one party suffers a loss or profits.

BBA 201 BL 9/7/2018

 In case of the breach of contract following different types of damages can
be awarded to the aggrieved party. They are

1. Ordinary Damages

2. Special Damages

3. Exemplary or Punitive or Vindictive Damages

4. Nominal Damages

5. Damages for Inconvenience and Discomfort

BBA 201 BL 9/7/2018

 Which naturally arise in the usual course of things from such breach.

 There are two conditions :

 The aggrieved party must suffer by breach of contract
 The damages must be direct consequence of the breach of contract

 The measure of ordinary damages is the difference between the contract

price and the market price on the date of the breach.

BBA 201 BL 9/7/2018

 A contracts to deliver 100 bags of rice at Rs. 100 per
bag on a future date. On the due dates he refuses to
deliver. The market price on that day is Rs. 110 per
bag. The measure of damages is the difference
between the market price on the date of the breach
and the contracted price i.e., Rs. 110-100 = Rs. 10.

BBA 201 BL 9/7/2018

 When there are certain special or extraordinary circumstances
present and their existence is communicated to the promisor,
the non-performance of the promise entitles the promisee to
not only the ordinary damages but also special damages that
may result there from.

BBA 201 BL 9/7/2018

 A, who is a builder, agrees to finish a house by 1 January
in order that B, may give possession of it at that time to
C, to whom B has contracted to let it. A is informed of the
contract between B and C. A builds the house so badly
that it falls down before 1 January and has to be rebuilt
by B. As a consequence, B loses the rent which he was to
have received from C, and is obliged to make
compensation to C for the breach of his contract.

 Thus A must make compensation to B for the cost of

rebuilding the house, for the rent lost, and for the
compensation made to C.

BBA 201 BL 9/7/2018

 • Such damages which are awarded with a view to punishing the guilty party for the
breach and not by way of compensation for the loss suffered by the aggrieved party.

• These are applicable in case of:

1.A breach of a contract to marry

The measure of damages in case of breach of promise to marry is dependent upon the
extent of injury to the party‟s feeling.

2. Dishonor of a cheque by a banker when there are sufficient funds to the credit of the
customer.

• In case of wrongful dishonour of a cheque, the rule is- smaller the amount of the cheque,
larger will be the amount of damages awarded and vice versa.

BBA 201 BL 9/7/2018

 Those which are awarded only for the name
sake.

 For example, where in a contract of sale of

goods, if the contract price and the market
price is almost the same at the date of breach
of contract, then the aggrieved party is
entitled only to nominal damages.

BBA 201 BL 9/7/2018

 When a party has suffered physical discomfort and inconvenience as a
result of breach of contract, that party can move a suit for claiming
compensation.

Example

 H, with his wife and children took a cab, to be transported to a particular

place where he lived. They were, however, transported to a wrong place
and they had to walk 5 km. on a drizzling night.

 H was awarded compensation for inconvenience.

BBA 201 BL 9/7/2018

 It means “AS MUCH AS EARNED” or “according to the
quantity of work done.”

 The phrase „Quantum Meruit‟ literally means

 When a person has begun the work and before he could
complete it, the other party terminates the contract or does
something which make it impossible for the other party to
complete the contract, he can claim for the work done under
the contract so far party.

BBA 201 BL 9/7/2018

◦ A, engages B, a contractor, to build a three storied
house. After a part of the house is constructed, A
prevents B from working any more. B, the contractor,
is entitled to get reasonable compensation for work
done under the doctrine of quantum meruit in addition
to the damages for breach of contract.

BBA 201 BL 9/7/2018

 Specific performance means the actual carrying out of the
contract as agreed.

 Under certain circumstances an aggrieved party may file a suit

for specific performance,

 Where damage are not an adequate remedy in the case of

breach of contract

BBA 201 BL 9/7/2018

 When the act agreed to be done is such that compensation in
money for its non-performance is not an adequate relief.

 When it is probable that the compensation in money cannot be

got for the non-performance of the act agreed to be done.

BBA 201 BL 9/7/2018

 „Injunction‟ is an order of a court prohibiting a person
from doing a particular act.
 Demanding court‟s stay order
 Where a party to a contract does something which he
promised not to do, the court may issue an order
prohibiting him from doing so.

BBA 201 BL 9/7/2018

 A, a singer contracts with B the Manager of a
theatre to Sing at his theatre for one year and to
abstain from Singing at other theatres during the
theatre. She absents herself , B cannot compel A to
sing at his theatre, but he may sue her for an
injunction restraining her from Singing at other
theatres .

BBA 201 BL 9/7/2018

 Damages in contract law are a legal remedy available
for breach of contract. Damages are an award of money
to compensate the innocent party. The primary purpose
of damages in contract law is to place the injured party
in the position they would have been in had
the contract been performed.

BBA 201 BL 9/7/2018