Lecture 10

Remedies for Breach of Contract[Where there is a right there is a remedy]

Breach of ContractActual Breach of ContractAt the time when performance is dueDuring the course of performance of the contractExpress repudiation

Implied repudiation(ii) Anticipatory Breach of Contract

Remedies for breach of ContractRescission of contract Suit for damagesSuit upon quantum meruitSuit for specific performance of the contractSuit for injunction

Rescission or CancellationRevocation or discharge of contractBenefits are restored and compensation for damages can be claimedRescission is granted in the cases when:The contract is voidable at the option of the plaintiff The contract is unlawful for causes not apparent on face and defendant is more to blame that the plaintiff.

Rescission or CancellationThe court may refuse to rescind the contractWhere the plaintiff has expressly or impliedly ratified the contractWhen original positions of the parties can’t be restored due to changed circumstancesWhen third parties have, during the subsistence of the contract acquired rights in good faith and for valueWhen only one part of the contract is to be cancelled and that is not separable from the rest of the contract.

Suit for DamagesInjured party is compensatedMaking compensation in money as a substitute for the promised performance.

1. Damages: [Doctrine of restitution]Types of damagesA. Ordinary Damages,B. Special Damages,C. Vindictive, or Punitive or Exemplary Damages, andD. Nominal Damages

Ordinary DamagesA contracts to deliver 100 bags of rice at Rs. 100 a bag on a future date. On the due date he refuses to deliver. The price on that day is Rs. 110 per bag. Themeasure of damages is the difference between the market price on the date of thebreach and the contract price, viz., Rs. 1,000.

B. Special DamagesA delivers to B, a common carrier, a machine to be conveyed, without delay, to A’s mill, informing B that his mill is stopped for want of the machine. B unreasonablydelays the delivery of the machine, and A in consequence, loses a profitable contractwith the other Company.

C. Vindictive Damages These have been awarded (a) for a breachof promise to marry; (b) for wrongful dishonour of a cheque by a banker possessing adequatefunds of the customer. D. Nominal Damages

Suit upon quantum meruitQuantum meruit determines the amount to be paid for services when no contract exists or when there is doubt as to the amount due for the work performed but done under circumstances when payment could be expected. For e.g. Emergency services provided by a doctor.

Suit for specific performance of the contractOrder of the court upon the guilty party to perform what he promised to do. Such a remedy is possible in some cases such as:Where monetary consideration is not an adequate remedy for the breach of contract.

When there exists no standard for ascertaining the actual damages caused by the non-performance of the contract.

When it is probable that compensation in money on non-performance of the contract cannot be obtainedSuit for specific performance of the contractExceptions to specific performances to be granted:Where the contract is of personal natureWhere damages are an adequate remedyWhere the court cannot supervise the execution of the contractWhere the contract is made by the trustees in breach of their trust

Suit for injunctionAn injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions.In some cases, breaches of injunctions are considered serious criminal offenses that merit arrest and possible prison sentences.

Lecture 10

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Lecture 10