Remedies for breach of contract

The principal remedies for breach of contract are: (a) damages; (b) specific performance of the contract; and (c) injunction. 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. The same principle applies for determining damages for breach of an obligation arising from quasicontract. 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. Illustration A stipulation for increased interest from the date of default may be regarded as a stipulation by way of penalty, if the amount is excessive. The court is empowered to reduce it to an amount reasonable in the circumstances. Specific performance and injunctions In certain special cases dealt with in the Specific Relief Act, 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.

Minor's Position In The Contract Act or Effects Of Law On Minor Agreement :Any person who has not attained the age of eighteen tears, is minor in the eye of law. A minor has no capacity to enter into contract. His agreement is absolutely void. The contract act very clearly says that the parties to a contract must be competent to contract. A person is a competent who is of the age of majority. An agreement entered into by a minor is not enforceable at law.

REASON :Law is a guardian and it protects the minor against his own in-experience and improper acts made in the early years of life. A minor is supposed to be incapable of judging what is good and what is bad for him.

1. Minor and Equitable Consideration :A minor is not liable to perform what he has promised to do under the agreement not to repay the money that he has received under it. According to the law a minor can not be compelled to compensate for any benefit received by him under his agreement which is void.

2. Estoppel Case :Estoppel means when someone makes an other person to believe that a particular thing or fact is true. Then later on he can not be allowed to deny the truth of that thing. Example :- Mr. Kashif a minor induces Miss. Sheela to enter into a contract with him by a fraudulent misrepresentation that he is of full age. Now after attaining the age of majority, he says that he was minor at the time of entering into contract. No doubt Mr. Kashif deceived Miss. Sheela but a minor cannot be stopped from setting up defence of his infancy.

3. Rules About Partnership :A minor cannot become a partner, but with the consent of all other partners, he can be admitted in the benefits of the partnership. He is not liable only upto his shares in the firm.

4. Rules About Favourable Agreement :A minor can take benefit of that agreement which is made for his benefit. Example 1 :- Mr Karmu borrows the money from Mr. Nutwar a minor and executes a mortgage of a house in favour of Mr. Nutwar (a minor) then Mr. Nutwar can enforce the mortgage as it is in favour of the minor. Example 2 :- If Mr. Nutwar a minor borrows the money from Mr. Karmu and executes a mortgage of a house in a favour of Mr. Karmu then Mr. Kermu cannot enforce the mortgage as it was executed by the

minor. Example 3 :- In case of promissory notes bonds and bill of exchange executed by a minor are not enforceable by law, if these are against the benefit of the minor. On the other hand minor may enforce a promissory note or bond executed in his favour.

Note : If a guardian purchases an immoveable property on behalf of the minor the contract is valid.

5. Rules About Agent :A minor can be an agent. On behalf of the principal he may enter into contract with the third party. He can make his principal responsible by his acts. But he himself is not liable to his principal.

Note : No doubt a minor cannot enter into a valid contract but minority does not affect adoption, marriage dower and divorce.

6. Minors Surety :In case of contract guarantee an adult stands surely for minor. In this case minor is not awarded but adults is liable under the contract. Example :- Mr. Nadir a minor makes a contract with Mr. Riaz. Mr. Noor stands surety for Mr. Nadir. The contract is valid.

7. Parents Position :The parents of minor are not liable for agreements made by their minor. The parents can be held responsible of the minor acts as their agent. Example :- Mr. Agha send his son to Mr. Noor a minor to buy goods from Mr. Habib. Mr. Noor buys goods but Mr. Agha who is father is responsible for payment.

8. Minor & Negotiable Instruments :A minor can draw and deliver the negotiable instruments. He is not liable but all the other parties to the instruments are liable. Example :- A minor draws a bill on Y. Y accept the bill. S endorses it to K. The bill is valid.

9. Case Of Insolvency :In this case minor cannot be declared insolvent. If he has no property then payment cannot be recovered.

10. Adult and Minor Agreement :If the above two enter in to the agreement with the third party, the adult will be liable but minor will be not responsible. Example :- The Mr. Jacky minor and Mr. Arif adult make an agreement with Mr. Nash to purchase a factory. The contract is valid.

11. Company Shares :A minor cannot become the share holder of the company. But in case of fully paid up shares a minor can become a shareholder of the company. Example :- Jacky has fully paid up shares in a company. He dies and leaves Mr. Anderson a minor as a legal representative. The company is bound to transfer the shares to Mr. Anderson.

12. Necessaries of Minor :A person who provides the necessaries to the minor is entitled to recover from the property of the minor. If the minor s not liable personally. Example :- Mr. Vitory supplies necessaries to Mr. Kim a minor for his life. Mr. Vitory can recover the amount from Mr. Kim's property. If property is not available then Mr. Kim is personally not liable.

Explain the term holder and holder in due course and explain fully the privileges granted to a holder in due course
Explain the term holder and holder in due course and explain fully the privileges granted to a holder in due course

HOLDER :Holder has three characteristics : 1. Document is in hand. 2. He is entitled to receive the amount written on the document. 3. He is entitled to sue against the refusal.

Holder In Due Course :Holder in due course should possess the feature : 1. A holder in due course must have become a holder of the instrument before the date of its maturity. He must be entitled to transfer it. 2. He must be a holder for a valuable consideration. 3. He must be valid holder of the instrument. 4. He must be a holder of the instrument in good faith. 5. Amount of document will be payable on that date when it will be presented. 6. He should be entitled to sue in case of refusal of payment. 7. He must have taken instrument complete and regular on the face of it.

PRIVILEGES OF HOLDER IN DUE COURSE:Following are the important privileges which are enjoyed by the holder in due course.

1. Better Title :A holder in due course gets better title than the transferor while a holder cannot get a better title. Example :- Mr. Senha obtains an instrument by fraud he cannot sue it. If he transfers it to Mr. Nehra which make Mr. Nehra a holder in due course, Mr. Nehra can sue on the instrument.

2. Free From All Defects :As the instrument passes through the hands of a holder in due course to the subsequent holders, it becomes free from all defects.

3. Liability of Satisfaction :In case of negotiable instrument all the prior parties are liable to the holder in due course until it is duly satisfied. The holder in due course has right to sue against any prior party.

4. Invalidity of the Instrument :Any drawer, maker , or acceptor can not take the place of original invalidity of the instrument against the holder in due course.

5. Incomplete Stamped Instrument :In this case if the original payee fills more amount than that was authorized, he cannot enforce the instrument for the whole amount. If this instrument is transferred to the holder in due course, he can claim the whole entered amount.

6. Payees Incapacity :In this case a holder in due course can claim the payment in his own name despite the payees incapacity to indorse the instrument.

7. Fictitious Bill :The bill is said to be fictitious when it is drawn in a fictitious name and is made payable to the drawer order. It is not a good bill but the acceptor of a such bill is liable to the holder in due course.

8. Conditional Instrument :When one instrument is delivered for special purpose an not for the transfer of ownership, this does not affect the holder in due course. If it is negotiated liable on the instruments shall remain liable to him.