REMEDIES FOR BREACH OF

CONTRACT

PREPARED BY
NIMIKA
PRACHI
PRERNA
SANTOSH
SHILPA
YOGENDER
INTRODUCTION
 When ever there is breach of contract, the injured
party becomes entitled to any one or more of the
following remedies against the guilty party:
 1. Rescission of contract
 2. Suit of damages
 3. Suit upon quantum meriut
 4. Suit for specific performance of the contract
 5. Suit for injunction
 1. Rescission of contract:

 When there is breach of contract by one party, the other party

may rescind the contract and need not perform his part of
obligations under the contract and may sit quietly if he does not
want to take any legal action against the guilty party.

 But in case the aggrieved party intends to sue guilty party for
damages for breach of contract, he has to file a suit for
‘Rescission of Contract’.

 When the court grants rescission , the aggrieved party is freed

from all his obligations under the contract, and becomes entitled
to compensation for damages which he has sustained through the
nonfulfilment of contract. ----
• 2. Suit of damages:

 Damages are monetary compensation allowed to the injured

part for the loss or injury suffered by him as a result of breach
of contract.

 The fundamental principal underlying damages is not

punishment but compensation.

 By awarding damages the court aims to put the injured party

into the position he would have been, had there been
performance and not breach, and not to punish the defaulter
party.
 Types of damages:

 A. Ordinary or General or Compensatory Damages:

 When a contract has been broken, the injured party can, as a

rule, always recover from the guilty party ordinary or general
damages. These are such damages as may fairly and
reasonably be considered as arising naturally and directly in the
usual course of things from the breach of contract itself.

 Generally in the use of a contract for ‘sale and purchase’ the

general rule as regards measure of damages is that the damages
would be assessed on the basis of difference between the
contract price and the market price at the date of breach. ----
 Ordinary damages can not be claimed for any remote or
indirect loss or damage by breach of contract and the
damages will be paid only for those loss which arises
naturally in the usual course of things.

 E.g. A railway passenger’s wife caught cold and fell ill due to his
being asked to get down at a place other than the railway station.
In a suit by the plaintiff against the railway company held
damages for personal inconvenience of plaintiff alone can be
granted, but not for sickness of plaintiff’s wife, because it was
very remote consequence.

 ----
 B. Special Damages: (Remote Damages)

 These damages are claimed in the case of loss

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

 The communication of special circumstances

in a prerequisite to the claim for special
damages. ----
  C. Exemplary or Vindictive Damages:

 There are such damages which are awarded with a view to

punish the guilty party for the breach and not by way of
compensation for loss suffered by the aggrieved party. This
mode is adopted only in following two situations-
 
 Breach of contract to marry : in this case the amount of
damages will depend upon the extent of injury to the
party’s feelings. One may be ruined, other may not mind
so much

 Dishonor of a cheque by a banker when there are

sufficient funds to the credit of customers: In this case
the rule of ascertaining damages is “the smaller the cheque,
the greater, the damage”. Of course, the actual amount of
damages, will differ according to the status of party.
  D. Nominal Damages:

 Nominal damages are those which are awarded only for the
name sake. These are neither awarded by way of compensation
to the aggrieved party nor by way of punishment to the guilty
party.

 These are awarded to establish the right to decree for breach of

contract when the injured party has not actually suffered any
real damage and consist of a very small sum of money, say a
rupee or two.
 
 E.g. 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.
 3. Suit upon Quantum Meriut

 The third remedy for a breach of contract available to an

injured party against the guilty party is to file a suit upon
‘quantum merit’. The phrase ‘ quantum merit’ literally means
“as much as is earned” or “in proportion to the work done.
 
 A right to use upon ‘quantum merit’ usually arises where after
part performance of the contract by one party, there is breach
of contract or the contract is discovered void or becomes void.
This remedy may be availed of either without claiming
damages (i.e. claiming reasonable compensation only for
work done) or in addition to claiming damages for breach (i.e.
claiming reasonable compensation for part performance and
damages for the remaining unperformed part)
 
 E.g.
‘A’ agreed to decorate ‘Bs’ flat for a lump-
sum of Rs. 750. ‘A’ did the work but ‘B’
complained for faulty workmanship. It Cost ‘B’
Rs. 204 to remedy the defect. Held, A could
recover from B Rs. 750 less Rs. 204.
 4. Suit for Specific Performance

 There are other remedies in a contract suit besides damages.

The main one is Specific Performance.

 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, i.e.
for a decree by the court directing the defendant to actually
perform the promise that he has made.

 Where damages are not an adequate remedy, the court may

direct the party in breach to carryout his promise according
to the term of the contract.
 Some of the instances where court may direct specific
performance are-

 A contract for the sale of a specific house

 A contract for the sale of a specific rare (antique) article.
 Any other article for which monetary compensation is not enough
because the injured party will not be able to get an exact substitute
in the market.

 However, specific performance may not be granted in case-

 where monetary compensation is an adequate relief.

 the contract is of personal nature e.g. a contract to paint a picture.(in
such case injection is granted in place of specific performance)
 where the court cannot supervise the actual execution of contract
e.g. a building construction contract.
 5. Suit for an Injuction :

 Injuction is an order of a court restraining a person

from doing a particular act where a party is in breach of
a negative term of contract i.e. where he does
something which he promised not to do. The court
may by issuing an order, prohibit him from doing so.
----

EXAMPLE ( LUMELY V WAGNER)

 A SINGER AGREED TO SING AT B’S THEATRE FOR
CERTAIN PERIOD. SHE FURTHER AGREED THAT
DURING THE PRSCRIBED PERIOD SHE WILL NOT
SING AT ANY OTHER THEATRE. AFTERWARDS, A
MADE A CONTRACT WITH C TO SING AT HIS
THEATRE AND REFUSED TO SING AT B’S
THEATRE. B FILED A SUIT RESTRAINING A FROM
SINGING AT C’S THEATRE. IT WAS HELD THAT
ALTHOUGH A COULD NOT BE COMPLLED TO
SING AT B’THEATRE, BUT SHE COULD BE
RESTRAINED BY INJUNCTION FROM SINGING AT
C’S THEATRE.
THANK
YOU