Breach of contract
Breach of contract means when one party fails or refuses to perform his obligation
Remedies for breach of contract
Following remedies are available to aggrieved party for breach of contract against the guilty party
- Suit for rescission
- Suit for damages
- Suit upon quantum meruit
- Suit for specific performance
- Suit for injunction
1) Suit for rescission
Rescission means cancellation of contract. When one party breaches the contract the other party may rescind contract and refue to perform his part of obligation. The aggrieved party may sue the guilty for damages Example A agrees to sell his car to B for 6 lac Rs. But on due date A refuses to hand over his car. B is discharged from contract and can claim damages
2) Suit for damages
Damages are the monetary compensation allowed to aggrieved party for the losesuffered by him as a result of breach of contract. The aggrieved party can claim the following damages
i) General damages
ii) Specific damages
iii) Exemplary damages
iv) Liquidated damages
i) General damages
Ordinary damages are those which naturally arise as a result of breach of contract For example in a contract of sale of goods the difference between the contract price and market price are the damages that can be claimed
ii) Specific damages
These are the direct loses which arise due to the breach of contract. These damages arise under some special cases
iii) Exemplary damages
These damages are awarded not to punish the guilty party and not compensate the injured (aggrieved) party for the loss suffered.
iv) Liquidated damages
When the parties to a contract fix the amount of damages at the time of formation of contract such damages are called liquidated or nominal damages.
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3)suit for quantum meruit
Quantum meriut means payment in proportion of work done. Sometimes one of the parties has done a part of his obligation but the other party commits the breach of contract. In such case the party who has performed some work has right to claim for the value of work done and damages for the remaining work. Example A agrees to construct a three story house for B. when only one story was constructed, B prevented A from doing more work. So here A is entitled to get the reasonable compensation for the work done and the damages for remaining work.
4) Suit for specific performance
When only damages are not enough to compensate then the court may order guilty to perform specific performance Specific performance is granted in the following ways
a) When compensation in money is not enough
b) When compensation cannot be obtained
c) Where one of the parties is a minor
d) Where the contract involves personal skills, taste and qualification Example Ali agrees to sale his plot of land to Majid who agrees to purchase it to erect his mill there. Later, Ali commits breach. It was held by court to carryout contract
5) Suit for injunction
Injection is an order from the court of law prohibiting a person from doing a specific act. It is granted where the damages are not the adequate relief Example Farrah a lady singer enter into an agreement with Salman to sing at salman’s theater and nowhere else. Afterwards Farrah made a contract with Sheraz to sing at his theater and refused to perform her contract with Salman. It was held that, Farrah could not be compelled to sing at salman’s theater she was prohibited by the court form singing for Sheraz.