Dr.

Hemant Anbhule 1
Breach of Contract
Performance
Parties meet the contractual obligations
(duty/responsibility) and promises made.

Failure to perform is a breach of contract

Dr. Hemant Anbhule 2

Dr. Hemant Anbhule 3
Breach of Contract
Refusal to carry out the contract promise
May allow (Leads to)….
○ Discharge of the contract
○ Damages
○ Court order requiring performance

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Express Repudiation
(Denial)
Stated refusal to perform
○ Conduct (Actual Act)
○ Written or verbal communication
Anticipatory breach
○ Repudiation before time fixed for performance
○ Allows the injured party to:
 Discharge and sue for damages
 Continue with contract and sue for damages at the
time fixed for performance

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Anticipatory breach: repudiation is
suggested by the conduct of the party or
from statements made before time of
performance

 Fundamental Breach : Is a breach so

fundamental that it permits the distressed
party to terminate performance of the
contract, in addition to entitling that party
to sue for damages.

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Remedies for Breach
1.Suit for Specific Performance –
In this case, the court directs the party
committing the breach of contract to
perform the promise according to the
terms of contract.

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Remedies for Breach
2. Suit for Injunction –
 Injunction is an order of the court which
prevents a wrongful act or bring under
control the performance of a particular
act.
 An injunction may be filed against an
act which is involved in a breach of
contract.

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Remedies for Breach
For example, if X is doing something which
it promised or agreed on not doing, then
an injunction may be filed against X.

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Remedies for Breach
3. Suit for Rescission of Contract –
 When one party of the contract breaches the
contract, the other party will be discharged
from performing his part of the obligations.
 The hurt party may withdraw the contract
and file a sue for damages as per S.75 of
Indian Contract Act, 1872.

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Remedies for Breach
4. Suit for Quantum Merit –
 Quantum Merit is Latin word for “what one
has earned”.
 The aggrieved party can file a suit upon
quantum merit and may claim payment in
proportion to work done or goods supplied.

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Remedies for Breach
 For example, if X and Y have agreed to
construct a building together. X has
performed part of the contract but Y has
not. Then, X is entitled to receive award
as per to the work done by him.
 This would be a claim Quantum Merit.
 Sections 65 to 70 deal with the provisions
relating to suit for Quantum Merit.

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Remedies for Breach
5.Suit for Damages or Compensation-
 If contract is broken, the injured party
has a remedy to claim for damages and
losses suffered by it.
 The aim of this remedy is to ensure that
the injured party is placed at the same
financial position, in which it would have
been had the contract been performed.

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Remedies for Breach
5.Suit for Damages or Compensation-
 The damages would be awarded only if
the aggrieved party is able to prove
actual loss.

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Remedies for Breach
 Damages are classified into four types.
(i) Ordinary or General Damages
 These are the damages which arise naturally
or directly out of the breach of contract.
 For example, if X fails to pay the due amount
to Y on the specified day, and as a
consequence, Y is unable to pay his debts
and suffers a loss; X is liable to pay the due
amount as well as the interest on it.

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Remedies for Breach
 ii) Special Damages
 Special Damages can be claimed only if
special circumstances which would
result in a special loss in case of breach
of contract are brought to the notice of
the party.
 These damages arise on account of the
special or unnatural circumstances
attached to the contract.

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Remedies for Breach
ii) Special Damages
 For example, the loss of profits suffered
by a party in case of delay in arrival of
equipments or machinery in the factory
or workplace.

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Remedies for Breach
(iii) Exemplary or Punitive Damages
 These damages are aimed at punishing
the guilty party for the breach and not at
compensating the aggrieved party.
 They are meant to discourage the
defaulting party from engaging in a
similar behavior in the future.

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Remedies for Breach
(iv) Nominal Damages
 Nominal damages are awarded when
there is no significant loss suffered by
the aggrieved party.
 It is awarded only to establish the right
of the injured party.

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Remedies for Breach
(v) Liquidation Damages
 Liquidated damages are the specific damages
which are pre-determined. They are typically
part of contracts.
 It must be a fair estimate of the amount of
damages in case of a breach and should be
arrived at, by both parties, during contract
negotiations.

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 Thank You….

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