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Case Study: TEAM-2

A contracted with B to supply 500 tons of iron steel at Rs. 5000 per ton by a specified date. A then contracted with C to supply the same 500 tons of iron steel at Rs. 4800 per ton, informing C that this was to fulfill A's contract with B. C failed to deliver the iron steel, so A could not fulfill their contract with B, causing B to rescind the contract. A can claim damages from C for the loss caused by C's breach of contract. Under Section 73 of the Indian Contract Act, A is entitled to Rs. 100,000 in damages from C, being the profit A would have made fulfilling the B contract, since C was informed of A's contract with B.

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65 views5 pages

Case Study: TEAM-2

A contracted with B to supply 500 tons of iron steel at Rs. 5000 per ton by a specified date. A then contracted with C to supply the same 500 tons of iron steel at Rs. 4800 per ton, informing C that this was to fulfill A's contract with B. C failed to deliver the iron steel, so A could not fulfill their contract with B, causing B to rescind the contract. A can claim damages from C for the loss caused by C's breach of contract. Under Section 73 of the Indian Contract Act, A is entitled to Rs. 100,000 in damages from C, being the profit A would have made fulfilling the B contract, since C was informed of A's contract with B.

Uploaded by

APARNA SENTHIL
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CASE STUDY

TEAM-2
QUESTION

A contracted with B to supply him (B) 500 tons of iron steel at Rs.5000
per ton , to be delivered at a specified time. Thereafter , A contracts
with C for the purpose of 500 tons of iron steel at Rs.4800 per ton , and
at the same time told C that he did not so for the purpose of performing
his contract entered into with B . C failed to perform his contract in
due course , consequently ,A could not procure any iron steel and B
rescinded the contract what could be the amount of damages which A
could claim from C in the circumstances? Explain with reference to the
provisions of the Indian contract Act,1872.

2
EXPLANATION
 The problem in the question is based on the provisions of the Indian Contract
Act, 1872 as contained in Section 73. Section 73 provides that 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 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
 In the instant case ‘A’ had intimated to ‘C’ that he was procuring iron steel from
him for the purpose of performing his contract with ‘B’. Thus, C had the
knowledge of the special circumstance. Therefore, ‘A’ is entitled to claim from
‘C’,`1,00,000 being the amount of profit ‘A’ would have made by the performance
of his contract with ‘B’. If A had not told C of B’s contract then the amount of
damages would have been the difference between the contract price and the
market price on the day of default.

3
RELEVANCE

BREACH OF CONTRACT ACT


A contract is breached or broken when any of the parties fails or
refuses to perform its promise under the contract. Breach of contract
is a legal cause of action in which a binding agreement is not honored
by one or more parties by non-performance of its promise by him
renders impossible. Section 37 of the Indian Contract Act,1872
provides that the parties to the contract are under obligation to
perform or offer to perform, their respective promises under the
contract, unless such performance is dispensed with or excused
under the provisions of the Indian Contract Act or of any other law.
4
Thank you

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