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Chapter: 11th Commerce : Discharge and Breach of a Contract

Remedies for Breach of Contract

There are various types of remedies for the injured parties listed as follows

Remedies for Breach of Contract

All parties to a contract are expected to perform their promises. When one party refuses to perform his promise, then the breach of contract takes place. The other party or parties are called aggrieved or injured party or parties.

 

Remedies

There are various types of remedies for the injured parties listed as follows

1.        Recission of Contract.

2.        Claim for Specific Performance.

3.        Claim for Injunction.

4.        Claim for Quantum Merit and

5.        Claim for Damages.

 

1. Recission of Contract

In case of breach of contract by one party, then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

For Example: M promises N to supply him a motor car on 1st January 2017, and N promises to pay for the motor car on 1st January 2017. N is absolved from paying its price.

 

2. Claim for Specific Performance

In some specific cases if the damages are not the adequate remedy, then the court can direct the party in breach for the specific performance of the contract. In such case, the promise is carried out as per terms and conditions of the contract.

Generally in the following cases, the court grants specific performance

·           When the act agreed to be done is such that compensation in money for its non- performance is not sufficient

·           When it is probable that compensation in money cannot be received for the non- performance of the act agreed to be done

·           When there is no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done

On the other hand, the court does not grant specific performance in the following cases:

i.               Damages are an adequate remedy

ii.               The contract is not certain

iii.               The contract is inequitable to either party

iv.               The contract is of revocable nature

v.               The contract is made by the trustee in breach of trust

vi.               The contract is of personal nature i.e., contract to marry

vii.               The contract made by a company ultra-vires of its Memorandum of Association

viii.               The court cannot supervise its carrying out

 

3. Claim for Injunction

Injunction is an order passed by a competent court restraining a person from doing some act. Injunction can be defined as a mode   of securing the specific performance of the negative terms of a contract. Negative terms of contract imply doing something, which  a party has promised not to do. Injunction is an order which is granted by the court restraining the person to do what he had promised not to do.

The court may order injunction in the following cases –

a.        if the contract is voidable.

b.        if the contract becomes void or

c.         on discovering the contract as void.

 

4. Claim for Quantum Merit

The claim for quantum merit may arise if a contract performed by one party has become discharged by breach of the other party. The meaning of the phrase quantum merit is ‘as much as earned’. The claim is not for the original contract that has been discharged or void, but on an implied promise by the other party to pay for what he has done.

Quantum merits arises in the following circumstances.

a.        If a contract is found to be void.

b.        If something is done without any intention to do so gratuitously.

c.         If one party abandons or refuses to perform the contract.

d.        If a contract is divisible.

e.         If a contract is performed badly.

 

5. Claim for damages

Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him. As per contract, one party can claim damages if other party breach the contract. The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution. The Section 73 of the Indian Contract Act, 1872 deals with the compensation for loss or damages caused by a party for breach of contract. There are mainly four types of damages, such as-

·           Ordinary damages

·           Special damages

·           Vindictive or exemplary damages and

·           Nominal damages.


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11th Commerce : Discharge and Breach of a Contract : Remedies for Breach of Contract |


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