Breach of Contract &

its Remedies
THE CONTRACT ACT, 1872
Presented to

Brig. (R) Muhammad Saleem

Presented By

Imran Ali LCM 3509

All agreements are contracts if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object,
and are not hereby expressly declared to be void.
 Essential Elements of a Valid Contract
• Proper offer and proper acceptance. There must be an agreement based on a lawful offer
made by person to another and lawful acceptance of that offer made by the latter.
• Lawful consideration: An agreement to form a valid contract should be supported by
consideration. Consideration means “something in return” (quid pro quo).
• In order to make a valid contract the parties to it must be competent to be contracted. A
person is considered to be competent to contract if he satisfies the following criterion:
• The person has reached the age of majority.
• The person is of sound mind.
• The person is not disqualified from contracting by any law.
 Essential Elements of a Valid Contract
• To constitute a valid contract there must be free and genuine consent of the parties to
the contract. It should not be obtained by misrepresentation, fraud, coercion, undue
influence or mistake.
• The object of the agreement must not be illegal or unlawful.
• Agreements which have been expressly declared void or illegal by law are not
enforceable at law; hence does not constitute a valid contract.
• Intention to Create Legal Relationships
• Certainty, Possibility of Performance
• Legal Formalities
 Who are competent to contract
• Every person is competent to contract who is of the age of majority
according to the law to which he is subject, and who is of sound mind, and
is not disqualified from contracting by any law to which he is subject.
 What is a sound mind for the purposes of
contracting
• A person is said to be of sound mind for the purpose of making a contract
if, at the time when he makes it, he is capable of understanding it and of
forming a rational judgment as to its effect upon his interests.
• A person who is usually of unsound mind, but occasionally of sound
mind, may make a contract when he is of sound mind.
• A person who is usually of sound mind, but occasionally of unsound
mind, may not make a contract when he is of unsound mind.
 "Coercion" defined
• "Coercion" is the committing, or threatening to commit, any act forbidden
by the Penal Code or the unlawful detaining or threatening to detain, any
property, to the prejudice of any person whatever, with the intention of
causing any person to enter into an agreement.
 "Undue influence" defined
• A contract is said to be induced by "undue influence" where the relations subsisting
between the parties are such that one of the parties is in a position to dominate the will
of the other and uses that position to obtain an unfair advantage over the other.
• In particular and without prejudice to the generality of the foregoing principle, a person
is deemed to be in a position to dominate the will of another
• Where a person who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that such contract was not
induced by undue influence shall lie upon the person in a position to dominate the will
of the other.
 "Fraud" defined
• "Fraud" means and includes any of the following acts committed by a party to a
contract, or with his connivance, or by his agent, with intent to deceive another
party thereto or his agent, or to induce him to enter into the contract:
• the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
• the active concealment of a fact by one having knowledge or belief of the fact
• a promise made without any intention of performing it;
• any other act fitted to deceive;
• any such act or omission as the law specially declares to be fraudulent.
 "Misrepresentation" defined
• The positive assertion, in a manner not warranted by the information of the
person making it, of that which is not true, though he believes it to be true
• Any breach of duty which, without an intent to deceive, gains an advantage
to the person committing it, or any one claiming under him, by misleading
another to his prejudice or to the prejudice of any one claiming under him
• Causing, however innocently, a party to an agreement to make a mistake as
to the substance of the thing which is the subject of the agreement.
Void ability of agreements without
free consent
 Agreements without free consent
• When consent to an agreement is caused by coercion, fraud or
misrepresentation, the agreement is a contract voidable at the option of the
party whose consent was so caused.
• A party to a contract, whose consent was caused by fraud or
misrepresentation, may, if he thinks fit, insist that the contract shall be
performed, and that he shall be put in the position in which he would have
been if the representations made had been true.
Remedies for breach of contract
 Remedies for breach of contract
The principal remedies for breach of contract are:

• Damages
• specific performance of the contract
• injunction.
 Remedies for breach of contract
• 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, being loss or damages 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.
• Such compensation is not to be given for any remote and indirect
loss of damage sustained by reason of the breach.
 Remedies for breach of contract
• The same principle applies for determining damages for breach
of an obligation arising from quasi-contract.
• In estimating the loss or damage arising from a breach of
contract, the means which existed of remedying the
inconvenience caused by the non-performance of the contract
must be taken into account. This is referred to, as the duty to
mitigate.
 Specific performance and injunctions
• In certain special cases dealt with in the Specific Relief Act, 1877,
the court may direct against the party in default "specific
performance" of the contract, that is to say, the party may be
directed to perform the very obligation which he has undertaken,
by the contract. This relief is awarded only in exceptional cases.
• That Act also deals with permanent injunctions. Temporary
injunctions are governed by the provisions of order of the Code of
Civil Procedure, 1908.
Thank you