Chapter11-REMEDIES FOR BREACH

OF CONTRACT
When one of the parties repudiates (deny)
the contract, by refusing to perform his
obligations, he is said to have committed a
breach of the contract. Following remedies
are provided by law:-
1. Cancellation or Rescission:-It is the
revocation of a contract. Where one of the
parties commits breach, the other party
may treat the contract as rescinded.
2. Restitution:-It means return of the benefit
received by one party to the contract from
the other party under the void contract.
3. Specific Performance:-It is a discretionary
remedy which is allowed only in a limited
number of cases. Under certain
circumstances a person aggrieved by the
breach of the contract can file a suit for
specific performance. Some of those cases
are as follows:
a) Where monetary consideration is not
enough.
b) When there exists no standard for
ascertaining the actual damage caused by
the non-performance of the act.
4. Injunction:-An order of the court
restraining the wrong doer from doing or
continuing the wrongful act complained of.
Injunction is a preventive relief.
5. Quantum Meruit:-It means payment in
proportion to the amount of work done.
Right to sue under this arises when one
party partly performed the contract there is
breach of contract by another party.
6. Damages: A person who commits a
breach must compensate to the injured
party. Damages mean compensation in
money as a substitute for the promised
performance.
Damages are of four kinds.
A) General or Ordinary: These include
damages which re the natural and probable
consequences of the breach of the contract.
These are usually assessed on the basis of
actual loss suffered. These are awarded with
a view to compensate the injured party not
with a view to punish the party at fault.

B) Special Damages: These are those which

are the result of unusual circumstances
affecting the plaintiff. These are the
damages which the parties knew, when they
made the contract, as likely to arise from
the breach of the contract. These must be
known to the party against whom the
damages are claimed.
C) Vindictive or Exemplary Damages: They
are awarded with a view to punish the
wrong doer and not primarily with the idea
of awarding the compensation. It should set
the example. ex. The amount of damages
claimed by the customer for the loss of his
reputation is not determined by the amount
cheque. Infact its opposite smaller the
amount more the damage
E) Nominal Damages: These are awarded
where the injured party has sustained
damage of a short but not of a sustainable
nature.e.g.
a) Where breach is technical.
b) Where the injured has not suffered any
actual damage or fails to prove that he has.
c) Where though damage hasbeen caused,
it was more due to the fault of the injured
party.
Principles Regarding The Measure Of
Damages: General principal is that injured
must be placed so far as is possible in the
same position as he would have occupied if
no breach had taken place.secttion73 of the
Indian Contract Act dealing with the
principles regarding the measure of
damages is based on the decision given in
Hadley v. Baxendale case.
The rules are as follows-
1. Restitution: The injured party is entitled
to be in the same position as if the contract
had been performed.
2. General Damages: A party who suffers by
the breach of contract is entitled to only
such which arise naturally in the normal,
usual course of things as a result of such
breach.
3. Special Damages: Where a party claims
such damages then he must prove that
other party at the time of making the
contract knew about special loss that was
likely tobe suffered in case of breach of
contract.
4. Remote Damages: Law does not award
damages which are either indirect or too
remote. Damages must be something which
is likely to flow out of the breach of the
contract directly not merely a series of
causes intervening.
5. Performance of Obligation: A person who
claims damages for a breach of contract
should have performed or was ever ready to
perform his part of the obligations.
6. Mitigation of Loss: A person who sues for
damages is bound to take all reasonable
steps to mitigate the loss resulting from
breach of contract and cannot claim any
sum which is due to his neglect .A plaintiff
cannot allowed to accumulate damages by
his own inaction.
7. Liquidated Damages: Where the parties
are agreed about the damages for the
breach of contract, no more than the agreed
amount can be awarded.
8. Vindictive damages: These are usually in
case of breach of contract of marriage or
wrongful refusal by the bank to honour the
customer’s cheque.
9. Damages on quasi-contract: Where an
obligation created by the quasi contract is
not discharged , the compensation awarded
is same as damages that would be awarded
if it were a breach of a contract.
10. Difficulty of Assessment: Difficulty of
calculating of damages is no ground for
refusing damages. The court must make an
assessment of loss and pass a decree for it.