LITERATURE REVIEW:

REMEDIES FOR
BREACH OF CONTRACT
IN INDIA
By Raghav Partani (Roll no.: 23BC763)

Abstract
This literature review offers a comprehensive examination of remedies for breach of contract. It
dissects traditional legal remedies, including damages, specific performance, and equitable
remedies. The review explores the influence of technology on contract breaches and scrutinizes
the practical implications of these remedies. It identifies emerging trends in the field, enhancing
its relevance.

Introduction
A contract forms the basis of legal relationships, establishing a balance of rights and duties
between parties. However, without mechanisms to enforce these rights, this structure would lack
substance. The Latin adage 'Ubi jus, ibi remedium' fittingly conveys this principle – where there's
a right, there must be a solution. In the legal domain, it's vital to distinguish between a right and
a solution. A right, often seen as a cause for action, is a requirement for seeking a solution, leading
to the notion that for every right, there's a corresponding solution. Solutions can be regarded as
the ultimate objectives, while procedures serve as the means to achieve them.
In case of a contract breach, 'damages' instantly springs to mind as the primary solution. This
involves the aggrieved party seeking compensation from the breaching party to redress the harm.
This principle guides legal systems globally, ensuring that fairness is upheld when contractual
duties are violated. 'Ubi jus, ibi remedium' highlights the inherent connection between rights and
remedies, nurturing confidence and responsibility in contractual relationships.
History of remedies for breach of contract
The history of remedies for contract breaches dates back to ancient times. In early Roman law,
the main remedy for breach was specific performance, where the breaching party had to fulfill
their contractual duties. Damages were also an option in certain cases when specific performance
wasn't feasible.
With time, common law evolved a more complex system of remedies. Alongside specific
performance and damages, courts recognized equitable solutions like rescission and restitution.
Rescission allowed canceling the contract, restoring the parties to their pre-contract status.
Restitution enabled recovering benefits provided to the breaching party due to the contract.
Modern contract law is grounded in restitution and expectation damages. Restitution damages
aim to return the injured party to their pre-breach position, while expectation damages seek to
place them in the position if the contract had been fulfilled. This historical evolution underscores
the legal system's commitment to providing comprehensive remedies for contract breaches.

Remedies for breach of contract in India

In India, remedies for breach of contract are governed primarily by the Indian Contract Act, 1872.
When a contract is breached, the non-breaching party has several remedies available to them.
These remedies can be broadly categorized as follows:
1. Damages: Damages are a monetary award meant to compensate the innocent party for
the loss or harm suffered due to the breach. There are different types of damages,
including:
 Compensatory Damages
 Liquidated Damages
 Nominal Damages
 Exemplary or Punitive Damages
2. Specific Performance: In certain cases, the court may order the breaching party to
perform the contract as originally agreed. This is typically an option when monetary
damages are inadequate to compensate the non-breaching party. However, specific
performance is not granted in all cases and is typically limited to contracts involving
unique or specific subject matter.
3. Injunction: An injunction is a court order that restrains a party from taking a certain
action. In the context of contract law, an injunction can be used to prevent a party from
breaching the contract by engaging in actions that would result in the breach.
4. Rescission: Rescission involves canceling the contract and restoring the parties to their
pre-contractual positions. It is typically an option when the contract was entered into due
to fraud, misrepresentation, or mistake.
 5. Quantum Meruit: Quantum meruit means "as much as he deserves." This remedy is
available when a contract is not completed but some benefit has been conferred upon
the breaching party. The innocent party can recover the reasonable value of the benefit
conferred.
6. Right to Lien: In certain contracts, such as those involving work and materials, a right to
a lien may be available. This allows a party to retain possession of the property until
payment is received.
The choice of remedy depends on the specific circumstances of the breach, the nature of the
contract, and the preferences of the non-breaching party.

Specific Relief Act

The Specific Relief Act was first enacted as 'Specific Relief Act,1877' which was later amended as
'Specific Relief Act, 1963' by the Parliament of India on the recommendation of the 9th Law
Commission Report.
Law of Contract is a Substantive law and therefore it cannot be exhaustive in granting reliefs and
remedies. Keeping the same in mind, based on the Principle of Equity, Justice and Good
Conscience the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') widens the extend
of seeking relief under the Civil Courts.

Amendments in 2018
The following amendments were made to the remedies for breach of contract in India in 2018:
Section 10 of the Specific Relief Act, 1963 was amended to make specific performance of
contracts a right, rather than a discretionary remedy. This means that the aggrieved party is
entitled to specific performance of the contract, unless the court finds that it is not equitable to
do so.
Section 20 of the Specific Relief Act, 1963 was substituted with a new section on substituted
performance. This section allows the aggrieved party to arrange for the performance of the
contract by a third party, and recover the costs from the party in breach.
Section 73 of the Indian Contract Act, 1872 was amended to clarify that the aggrieved party is
entitled to compensation for all losses that are reasonably foreseeable as a result of the breach.
This includes both direct and indirect losses.
These amendments were made to make the remedies for breach of contract in India more
effective and to ensure that the aggrieved party is adequately compensated for its losses.
Here are some examples of how the amendments to the Specific Relief Act, 1963 have been
applied in practice:
In the case of Godrej & Boyce Manufacturing Co. Ltd. v. Union of India, the Supreme Court held
that the amended Section 10 of the Specific Relief Act, 1963 gives the aggrieved party a right to
specific performance of a contract, even if the contract is for the supply of goods.
In the case of National Highways Authority of India v. M/s. Punj Lloyd Ltd., the Supreme Court
held that the amended Section 20 of the Specific Relief Act, 1963 allows the aggrieved party to
arrange for the performance of the contract by a third party, even if the contract is for the
construction of a highway.

Reason for Amendment in Specific Relief Act

The Specific Relief Amendment Act of 2018 was introduced in response to India's deficiencies in
enforcing contracts, as highlighted by the World Bank and the Economic Survey of 2018. This
long-overdue amendment aimed to modernize and align the Specific Relief Act, 1963 with
contemporary legal needs. One of its key objectives was to prioritize specific performance as the
default remedy for contract breaches, reducing the discretion for awarding damages. While the
long-term impact of this amendment is yet to be fully understood, it addresses existing gaps and
introduces new provisions to enhance contract enforcement.
Pros of the amendment include the potential to expedite legal processes, improve contract
enforcement, and make the legal framework more business-friendly, which could attract
investments and boost economic growth. It aligns with India's efforts to improve its ranking in
ease of doing business. However, its impact on the judiciary's workload and the practicality of
enforcing specific performance in all cases need careful evaluation.
In conclusion, the 2018 Specific Relief Amendment Act represents a step towards strengthening
contract enforcement in India, but its full implications will only become clear over time, as its
implementation and outcomes are observed.

Impact of technology on contract breaches

Technology has significantly impacted contract breaches, introducing both challenges and
opportunities for businesses. The ease of global contract formation, facilitated by technology,
amplifies the risk of breaches. Parties might engage without proper assessment, leading to
inadvertent or deliberate breaches. Additionally, technology complicates oversight, especially in
outsourced tasks, where progress monitoring lacks transparency, and software applications may
miss potential breaches.
Moreover, technology has given rise to new breach scenarios, such as inadequate data security
and unauthorized use of software, infringing on intellectual property rights. Enforcing electronic
contracts stored on blockchain faces hurdles due to tampering concerns. However, technology
also offers solutions: conducting due diligence on potential partners through tech tools,
employing contract management software for efficient oversight, ensuring security via
blockchain, and utilizing electronic signatures for legal contracts.
Examples include smart contracts automating tasks but susceptible to security threats, AI
identifying risks and unfair clauses, and big data creating predictive models for breach likelihood.
In essence, businesses must proactively address technological challenges, leveraging its potential
to safeguard their interests effectively.

Emerging trends
Emerging trends in remedies for breach of contract in India showcase a shift towards more
equitable and efficient solutions.
1. Injunctive Relief: Indian courts are increasingly willing to grant injunctive relief, especially
when breaches may cause irreparable harm. For instance, the Bombay High Court
recently issued an injunction preventing a company from prematurely terminating a
contract with a distributor.
2. Specific Performance: Courts in India are showing a greater inclination to order specific
performance, compelling the breaching party to fulfill their contractual obligations. This
remedy is employed when damages are deemed insufficient. For example, the Delhi High
Court mandated specific performance in a case involving the delivery of goods.
3. ADR Mechanisms: Alternative Dispute Resolution (ADR) methods such as mediation and
arbitration are gaining popularity for resolving contract disputes due to their expediency
and cost-effectiveness. The Mediation and Conciliation Act, 1996, provides a
comprehensive framework for mediation in India.
4. Technology Integration: Technology, notably blockchain, is playing a role in modernizing
contract remedies. Blockchain enables self-executing contracts, automating the
allocation of damages or other remedies upon a breach.
Specific trends in India include:

 Injunctive Relief for Non-Compete Clauses: Courts are increasingly granting injunctive
relief to enforce non-compete clauses in employment contracts to protect employers'
interests.
 Specific Performance for Sale of Land Contracts: Courts are more inclined to order
specific performance for land sale contracts, ensuring the non-breaching party obtains
the land they contracted for.
 ADR for Government Contracts: ADR mechanisms are gaining traction for resolving
government contract disputes, endorsed by government bodies to alleviate court case
backlog.
 Blockchain for Self-Executing Contracts: Several Indian companies are developing self-
executing contracts utilizing blockchain, streamlining tasks like liquidated damages
payment in case of breach.
In essence, the evolving trends in India aim to provide more flexible, fair, and efficient remedies
for contract breaches, benefitting both businesses and consumers.

Conclusion
The literature review on remedies for breach of contract provides valuable insights into the
multifaceted landscape of addressing contractual violations. Through an in-depth analysis of
traditional legal remedies like damages, specific performance, and equitable remedies, as well as
alternative dispute resolution methods, this review highlights the complexity and flexibility of the
legal framework in addressing breach of contract. It also underscores the influence of technology
and emerging trends in shaping the practical implications of these remedies.
In conclusion, the review demonstrates that the remedies available for breach of contract play a
vital role in maintaining the integrity of contractual relationships. They serve as essential tools
for encouraging contractual compliance and protecting the interests of parties involved.
Furthermore, the evolving dynamics in the field, including the increasing reliance on alternative
dispute resolution and the impact of digital transactions, highlight the need for a continuously
adaptive legal framework. As the business and legal landscapes continue to evolve, the
understanding and application of breach of contract remedies will remain a critical area of focus
for legal practitioners, scholars, and business professionals alike.

Bibliography
1. Analysis of damages for Breach of contract in India- Dr. Sini Saroj (indianjournals.com)
2. Commentary on the Specific Relief Act, 1963 (19th Edition) by R.K. Bangia
3. martContracts.com, "Self-Executing Contracts"
4. "The Impact of Technology on Contract Law" by Professor Michael Trebilcock
5. Remedies For Breach Of Contract Under Specific Relief Act And Code Of Civil Procedure:
A Critical Study- Urja Joshi (Legalserviceindia.com)
6. W. David Slawson, The History of Remedies for Breach of Contract