Remedies for Breach of Contract

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Remedies for Breach of Contract and Types of Damages

Parties to a contract area are unit duty-bounded to perform their guarantees. However, things arise wherever one among the parties to a contract could break the contract by refusing to perform his promise. This can be what's referred to as the breach of contract. Once one party commits a breach of contract, presently the opposite party is entitled to the subsequent remedies. When one among the party commits a breach of the contract, the opposite party becomes entitled to any of the subsequent reliefs:

  • Rescission of the contract

  • Damages for the loss suffered

  • Suit for the precise performance

  • Suit upon quantum meruit

  • Suit for the injunction

Rescission of the Contract

When one among the parties commits a breach of contract, another party shall additionally treat the contract as void or cancel. Once the contract is cancelled, the affected party is mechanically discharged from all the commitments beneath the contract. Section 64 of the Act provides that the party cancel the contract if he has received any profit under it from the opposite party; restore such profit to the person from whom it had been received. Further, the one that truly cancels the contract is entitled to compensation for any loss that he faced from the non-fulfilment of the contract.

Damages for the Loss Suffered 

The term “Damages” means that financial compensation collectable by the defaulting party to the affected party for the loss suffered by him once the contract was broken. Therefore, the aggrieved party could bring associate action for damages against the party who are guilty of the breach of contract. The party is guilty of the breach and is vulnerable to pay damages to the aggrieved party.  

Types of Damages

  1. Normal Damages or General Damages

Damages that arise within the normal course of events from the breach of contract are referred to as normal damages.

  1. Special Damages

Special damages are those damages that are collectable for the loss arising on account of some special or uncommon circumstances. That is, they undue the natural and probable consequences of the breach of the contract.

  1. Exemplary or Vindictive Damages

These damages are awarded against the party who has committed a breach of the contract with the thing of gruelling the fallible as a defaulting party and to compensate the aggrieved party. Generally, these damages are awarded just in case of action on loss

  1. Nominal Damages

These damages are in little quantity. They’re awarded merely to acknowledge the correctness of the party to say damages for the breach of the contract. Sometimes, the damages aren't associated with an adequate remedy for breach of the contract. In such cases, the Court could, at the suit of the party not in breach, direct the party in breach to hold out his promise as per the terms of the contract. This can be referred to as the precise performance of the contract.

Example: A united to sell associate previous stamp of the pre-independence amount to 8 for Rs.500. However, afterwards refused to sell it. During this case, B may file a suit against A for the precise performance of the contract and therefore the Court could order A to sell the stamp to B as united.

Some of the Cases Wherever the Court Could Direct the Execution Area Unit as Follow

  • Once the act is done, compensation in cash, for its non-performance, couldn't afford adequate relief.

  • Once there exists no normal for crucial the particular damages caused thanks to the non-performance of the contract.

However, Execution Shall Not Be Granted Within the Following Cases

  • Wherever the damages are associate adequate relief,

  • Wherever the contract is calculable.

  • Wherever the contract involves personal nature.

  • Wherever the Courts cannot supervise the effecting of the contract.

  • Wherever the contract isn't truthful and simple.

Suit upon Quantum Meruit

In a literal sense, the expression “Quantum Meruit” means that, “as very much like attained “. In an exceedingly legal sense, it means that payment in proportion to the work done. This principle provides for the payment of compensation under certain circumstances, to someone who has offered the products or services to the opposite party under a contract,  which couldn't be performed under certain circumstances.

Cases for Claim on Quantum Meruit

Wherever the work, that has been done and accepted under contract, is afterwards discovered to be void – Here the party has affected a part of the contract will truly the quantity for the work he has done. And therefore the party that accepts and reaps the profit under contract, should create compensation to the opposite party.

  • Wherever one party abandons or refuses to perform the entire contract. Here the compensation for the work done could also be recovered supporting quantum meruit.

  • Wherever one thing is finished with non-intention to try and do gratuitously. In such cases, the opposite person is certain to create the payment if he accepts such services or merchandise, or enjoys their profit.

  • Wherever the contract is cleavable and therefore the party has enjoyed the advantages of the work done – In such cases, the halfway in default could sue on quantum meruit if the opposite party has enjoyed the advantages of the part performance.

Suit for Injunction

The term” Injunction” could also be outlined as an associate order of the Court instructing someone to refrain from doing a little act that has been the subject-matter of the contract. wherever a celebration has secured to not do one thing and he will it, and thereby commits a breach of contract, the aggrieved party could ask for the protection of the Court beneath sure circumstances and procure associate injunction.

Example: A narrowed to sing solely at B’s theatre and obscurity else for an exact amount. Afterwards, A created a contract with C to sing at C’s theatre and refused to sing at B’s theatre. The Court refused to order a selected performance as a result of the contract was private however granted an associate injunction against A to restrain him from singing anyplace else.

FAQ (Frequently Asked Questions)

1. What is Money Damage?

Money damages see the financial payments that a breaching party must reek violating the terms of the contract. The sort of breach determines the extent of the damages. If it's a complete breach, then the complainant will recover the total or worth that the complainant would have received had the contract been performed by the litigator and this includes lost profits. However, if it's a breach of contract, the complainant will recover a total that equals the quantity necessary to rent some other person to finish that part of the contract. However, in some cases of breach of contract, the price of completion is quite pricey and therefore the portion of the contract that was upstaged could also be little. In these cases, a court could solely award damages that vary between the value of the contract as performed and therefore the full value of the contract that was originally united to by the parties.

 There Are Different Types of Cash Damages Such As

  • Compensatory Damages

This can be meant to hide the loss incurred by the non-breaching party thanks to the breach of contract. The breaching party can need to pay the associate quantity that replaces the loss incurred by the opposite party

  • Punitive Damages

This can be seldom awarded for breach of contract cases. In contrast to amends that are meant to hide the particular loss, redress is awarded to penalize the bad person for flagrant behaviour and to discourage others from committing similar acts. 

2. What is Restitution?

Restitution could be a remedy that wants to restore the victim to the position occupied before the contract. Under the principle of restitution, the litigator is meant to return any cash or property received from the complainant under the contract, Restitution is often utilized in cases wherever the contract is voided by the court as a result of the litigator lacking the ability or capability necessary to enter into a contract.

3. What is cancellation and Reformation?

Cancellation term is used when the whole contract has been cancelled for some reasons. Near future parties may come together to plan a contract if they are willing to do so.  It is different from reformation whereas reformation parties abide to follow their contract duties.

4. What is Specific Performance?

Specific performance is a skilled remedy performed by courts when no additional options are enough for compensating the other party. For example client A made an offer to buy Client B  villa, belatedly decided to keep the property. Here real estate role is distinct and vital, though there is no other villa similar like Client B. Client A is authorized to perform specific performance on the contract, whereas CLient B abides to go with the sale of the villa.