2.  Generally when ever a contract is made, it gives rise
to rights and obligations between the parties.
 When both the parties perform their obligation, the
contract is said to be performed and is treated as
„Terminated‟.
 But if any one of the parties to a contract does not
fulfill its contractual obligation, it is called „Breach
of Contract‟.

3.  A contract creates certain obligations that are to be
followed by the people who entered into the agreement.
 In the eyes of law, a party‟s failure to fulfill the
contractual obligation is known as „Breach of Contract.‟

4.  A Breach can occur when a party fails to perform on
time, does not perform in accordance with the terms of
the agreement, or does not perform at all.

5.  In case of breach of contract the party who does
not perform his obligation is called „Defaulting
Party‟ .
 Where as the other party who was interested in
the performance of the contract is called
„Aggrieved Party‟

6.  Actual Breach of Contract
 Anticipatory Breach of Contract

7.  When a party to a contract refuses or fails to
perform his part of the contract at the time fixed
for the performance of that contract, it is known as
„Actual Breach of Contract‟.

8.  When one party to a contract shows its intention
not to perform the contract before the contract
becomes due is called „Anticipatory Breach of
Contract‟.

9. 1.Exoneration from Performance/ Cancellation/
Rescission
 If a party to a contract breaches the contract, then
the aggrieved party may treat the contract as
terminated.
 In such a case, he is absolved of further obligations
under the contract.

10.  When the aggrieved party who wants to cancel
the contract gives or has given his express or
implied confirmation to the contract.
 When without the fault of any party, the
circumstances have changed in such a way, that
it becomes impossible to perform the obligation
in the given time.

11. 2. Claim for Damages:
 The aggrieved party can file a case against the
defaulting party for the loss suffered by him due to
breach of contract.
 This is also known as „Compensation of Damages‟.
 The amount of compensation always depend upon
the facts of the case and the level of loss incurred.

12. 3. Claim for Quantum Meruit:
 The term Quantum Meruit literally means “As much
as earned”.
 In other words we can say the payment in the
proportion to the amount of „work done‟ or
remuneration according to the work done.
 If a person has done some work for another in
pursuance of a contract which ha since been
discharged by the latter‟s wrongful breach. He may
obtain reasonable compensation for his work by suing
him on the basis of Quantum Meruit.

13.  If a person delivers something to another
person not with the intention to enter into
contract, but other person enjoys the benefit
thereof, then he becomes bound to make
compensation.
 Further, if there is a contract to do work for a
lump sum, payable only after the completion
of the work, no action can be brought on the
basis of Quantum Meruit.

14. 4. Claim for Specific Performance:
 Specificperformance is an order by the court upon
the party guilty of breach of contract directing him
to perform what he promised to do.
 Thisorder is issued by the court when it seems that
damages are not an adequate remedy, so the court
can ask for specific performance under Specific
Relief Act, 1963.

15. 5. Claim for Injunction
 According to Sec 42 of the specific Relief Act,
injunction is another form of specific performance.
 This
is a negative order of the court through which
one person does something which he had promised
not to do, the court by issuing an order may
prohibit him from doing so.

16.  The term damages implies the monetary
compensation for the loss suffered by the
aggrieved party as a result of breach of
contract by other party
 But the debatable question is that what
amount an aggrieved party may claim from
the defaulting party!

17.  Compensation for loss: In case of breach of
contract aggrieved party may ask for compensation
for loss.
 Efforts to use resources for minimizing the loss:
According to Sec 73, it is the duty of the aggrieved
party, in case of breach of contract to make efforts
to minimize the loss .

18.  Compensation where Penalty stipulated:
According to sec 74, if the amount of penalty
has already been determined, in case of
breach of contract, in such case the aggrieved
gets the right to recover that amount.

19.  Ordinary Damages: These are the normal losses
which arise because of breach of contract.
 Special Damages: In some special circumstances
the aggrieved party can claim for direct as well as
indirect damages, only if the defaulting party is
aware of such special circumstances.

20.  Exemplary or vindictive or punitive damages: This
is the amount charged to punish the guilty party
for the breach.

21.  Stipulated penality or Liquidated damages:
 Liquidated damages means a sum fixed at the time of
contracting, which is fair and genuine pre-estimation of
the probable loss that is likely to result from the breach of
contract.
 The amount of Penality is that amount which is not
concerned with the amount of actual loss occurring due
to Breach of Contract. Penality means a sum fixed at the
time of entering into contract, which is extravagant in
amount in comparison to the greatest loss due to Breach. It
is a kind of punishment.
 Interest as damage