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REMEDIES FOR BREACH OF
CONTRACT
Chapter – 13
Part - I
PPT by Sandeep Sharma
REMEDIES
I. Suit for Rescission of the Contract
II. Suit for Damages
III.Suit for Quantum Meruit
IV.Suit for Special Performance
V.Suit for Injunction.
(Remedies – judicial relief)
I. RESCISSION (CANCELLATION)
 It means putting an end to a contract.
 When promisor makes a breach then injured party may rescind (cancel)
the contract.
Mr. Chetan Mr. Bhagat
Deliver 50 mobiles
On 5 Dec.
Here, Chetan doesnot deliver & Bhagat
is entitled to cancel the contract & claim compensation.
I. RESCISSION (CANCELLATION)
 If an aggrieved party sue then the Court may Grant Cancellation in
following cases:-
i. Where the contract is voidable by the aggrieved party
ii. Where the contract is Unlawful.
 When Court Refuses Cancellation:-
i. Where a party entitled to cancel but it gives its consent to the
contract.
ii. Where victim party cannot cancel the contract.
I. RESCISSION (CANCELLATION)
 When Court Refuses Cancellation:-
Fraud
Meena
Deeka
Eena
Diamond ring
for value
Pledged
Here, Meena cannot
rescind the contract
because Eena already
pledged it to Deeka. Deeka
is Unaware about Eena’s
fraud on that Ring.
Where victim party cannot cancel the contract.
II. SUIT FOR DAMAGES
 It means damages are Monetary
compensation.
 The amount of damages is decided by the
Court.
The prime objective is not to punish the
default party but to compensate the injured
party for its loss of money & time.
II. SUIT FOR DAMAGES
Damages doesn’t happened, if both the
parties performed their obligations properly.
To bring the party in same position, where it
was supposed to be, if they had been
performed their performance.
II. SUIT FOR DAMAGES
Rules as to Payment of Damages:-
i. Natural/Ordinary damages: damages that arise ‘Naturally’,
& it is Implied or understood.These are also called ‘Direct Loss’.
Shankar Ehsaan
LED Screen
Rs. 30k/piece
Loy
Rs. 35k/piece
Purchased
Here, Mr. Shankar has to compensate 5k/piece to Mr. Ehsaan as
an Ordinary damage.
I. RESCISSION (CANCELLATION)
How to Measure Ordinary Damages
i. Market Price of Goods – Contract Price of goods (MP - CP)
ii. Goods are not available: market price of Nearest substitute.
iii. In absence of market: price of the nearest market.
iv. In case of special order: the actual price of that good.
II. SUIT FOR DAMAGES
Rules as to Payment of Damages:-
Mr. Lal Mr. Bal
TV Set
Rs. 10k/piece
Mr. Pal
Rs. 15k/piece
Sell
Here, Mr. Bal already told Mr. lal that if you don’t supply then i’ll
claim my damages from you.
ii. Special damages: aggrieved party entitled to claim which
other party already knew, when they made the contract.
II. SUIT FOR DAMAGES
Rules as to Payment of Damages:-
Mr. Surya Mr.Vansh
Sugar
500 KG
Mill closed
Indirect loss
Result
Here, Surya is not responsible toVansh, because Surya knows nothing
about its future impact onVansh’s business.
iii. Remote & indirect loss: No compensation is allowed for
such losses.
II. SUIT FOR DAMAGES
 Direct losses are ‘Matter of right’, like: Natural loss.
 If a victim party wants claim for it’s loss from third party then it must be
told prior, while making contract then only aggrieved party can claim for
loss, otherwise not, like: Special loss.
 Indirect loss is NOT a ‘Matter of right’, like: Remote loss.
D/B Natural, Special & Remote loss
(Matter of right – entitled for)
II. SUIT FOR DAMAGES
Rules as to Payment of Damages:-
iv. Compensation for breach of Quasi-contract: the compensation
for such damages are same as in any other contract [sec. 73 para 3].
v. Party must have actually suffered loss: where the party has not
actually suffered a loss due to the breach of contract, the party is not
entitled to claim damages.
II. SUIT FOR DAMAGES
vi. Vindictive/Exemplary damages are allowed: contract act & civil laws
are not to punish but will help you to get you your reasonable claim. Law has
no place for ‘Vindictive damages’.
The court only allows ‘Exemplary damages’ in case of:-
a. Breach of a contract to marry.
b. Wrongful dishonor of a Cheque by a banker “smaller the amount of
Cheque, larger will be the amount of damages awarded”.
(Vindictive – Revenge, बदला)
II. SUIT FOR DAMAGES
Vindictive Damages
Ms. Soni Mr. Mahipal
promise to marry
Here, Ms. Soni waiting for Mahipal on their wedding day but he cheats.
Soni suit a case, it seems Vindictive but she’ll get claim for the loss.
cheats on wedding day
a. Breach of a contract to marry.
II. SUIT FOR DAMAGES
vii. Nominal damages: sometimes, an aggrieved party suffers no
real loss but the court awards him nominal damages, say Rs. 1, just to
show that court favors innocent party.
Mr. Sanju Bay-Car Dealer
Promise to buy car
Here, Sanju failed to keep his promise.The demand of car was more than
supply so the dealer lost nothing on this contract.
failed to buy
II. SUIT FOR DAMAGES
viii. Mitigate (reduce) of damages: to measuring the damages , injured
party has to prove two things:-
Ms. Sania Mr. Mirzya
Loss of 50k claimed
reduce to 20k
a. He has suffered a loss due to Breach of a contract.
b. He has taken all reasonable steps to minimize the loss.
Here, Mirzya proves that Sania could mitigate it by 20k, then he has to
compensate only 30k, in this case.
II. SUIT FOR DAMAGES
x. Loss of reputation: general people can’t go in the court for claiming
compensation for the damages for loss of reputation but a businessman
can & the court may award damages. Eg:- dishonor of Cheque.
ix. Cost of Suit/Decree: when aggrieved party wins the case then it will
not only gets the compensation against loss but also liable to claim its
‘Cost of Decree’ (documentation expenses, that arise during the case) &
‘Cost of Suit’ (like: lawyer’s fees, this depends upon the judge in some
cases).
(Decree – court orders)
II. SUIT FOR DAMAGES
xi. Inconvenience/discomfort: when breach cause physical harm &
defaulting party knew that the breach would cause mental sufferings.
Photographer Mrs. Mayuri (bride)
Booked for wedding
Unable to come
Here, Mrs. Mayuri bought an action & entitled to damages for her injured
feelings.
II. SUIT FOR DAMAGES
xii. Difficulty in assessment: just having difficulty in assessment
does not relieve the defaulting party from the obligation to pay
the damages, court should somehow estimate loss.
End of Part - I

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Remedies for Breach of Contract "PART 1" (Chapter 13) - Business Law

  • 1. REMEDIES FOR BREACH OF CONTRACT Chapter – 13 Part - I PPT by Sandeep Sharma
  • 2. REMEDIES I. Suit for Rescission of the Contract II. Suit for Damages III.Suit for Quantum Meruit IV.Suit for Special Performance V.Suit for Injunction. (Remedies – judicial relief)
  • 3. I. RESCISSION (CANCELLATION)  It means putting an end to a contract.  When promisor makes a breach then injured party may rescind (cancel) the contract. Mr. Chetan Mr. Bhagat Deliver 50 mobiles On 5 Dec. Here, Chetan doesnot deliver & Bhagat is entitled to cancel the contract & claim compensation.
  • 4. I. RESCISSION (CANCELLATION)  If an aggrieved party sue then the Court may Grant Cancellation in following cases:- i. Where the contract is voidable by the aggrieved party ii. Where the contract is Unlawful.  When Court Refuses Cancellation:- i. Where a party entitled to cancel but it gives its consent to the contract. ii. Where victim party cannot cancel the contract.
  • 5. I. RESCISSION (CANCELLATION)  When Court Refuses Cancellation:- Fraud Meena Deeka Eena Diamond ring for value Pledged Here, Meena cannot rescind the contract because Eena already pledged it to Deeka. Deeka is Unaware about Eena’s fraud on that Ring. Where victim party cannot cancel the contract.
  • 6. II. SUIT FOR DAMAGES  It means damages are Monetary compensation.  The amount of damages is decided by the Court. The prime objective is not to punish the default party but to compensate the injured party for its loss of money & time.
  • 7. II. SUIT FOR DAMAGES Damages doesn’t happened, if both the parties performed their obligations properly. To bring the party in same position, where it was supposed to be, if they had been performed their performance.
  • 8. II. SUIT FOR DAMAGES Rules as to Payment of Damages:- i. Natural/Ordinary damages: damages that arise ‘Naturally’, & it is Implied or understood.These are also called ‘Direct Loss’. Shankar Ehsaan LED Screen Rs. 30k/piece Loy Rs. 35k/piece Purchased Here, Mr. Shankar has to compensate 5k/piece to Mr. Ehsaan as an Ordinary damage.
  • 9. I. RESCISSION (CANCELLATION) How to Measure Ordinary Damages i. Market Price of Goods – Contract Price of goods (MP - CP) ii. Goods are not available: market price of Nearest substitute. iii. In absence of market: price of the nearest market. iv. In case of special order: the actual price of that good.
  • 10. II. SUIT FOR DAMAGES Rules as to Payment of Damages:- Mr. Lal Mr. Bal TV Set Rs. 10k/piece Mr. Pal Rs. 15k/piece Sell Here, Mr. Bal already told Mr. lal that if you don’t supply then i’ll claim my damages from you. ii. Special damages: aggrieved party entitled to claim which other party already knew, when they made the contract.
  • 11. II. SUIT FOR DAMAGES Rules as to Payment of Damages:- Mr. Surya Mr.Vansh Sugar 500 KG Mill closed Indirect loss Result Here, Surya is not responsible toVansh, because Surya knows nothing about its future impact onVansh’s business. iii. Remote & indirect loss: No compensation is allowed for such losses.
  • 12. II. SUIT FOR DAMAGES  Direct losses are ‘Matter of right’, like: Natural loss.  If a victim party wants claim for it’s loss from third party then it must be told prior, while making contract then only aggrieved party can claim for loss, otherwise not, like: Special loss.  Indirect loss is NOT a ‘Matter of right’, like: Remote loss. D/B Natural, Special & Remote loss (Matter of right – entitled for)
  • 13. II. SUIT FOR DAMAGES Rules as to Payment of Damages:- iv. Compensation for breach of Quasi-contract: the compensation for such damages are same as in any other contract [sec. 73 para 3]. v. Party must have actually suffered loss: where the party has not actually suffered a loss due to the breach of contract, the party is not entitled to claim damages.
  • 14. II. SUIT FOR DAMAGES vi. Vindictive/Exemplary damages are allowed: contract act & civil laws are not to punish but will help you to get you your reasonable claim. Law has no place for ‘Vindictive damages’. The court only allows ‘Exemplary damages’ in case of:- a. Breach of a contract to marry. b. Wrongful dishonor of a Cheque by a banker “smaller the amount of Cheque, larger will be the amount of damages awarded”. (Vindictive – Revenge, बदला)
  • 15. II. SUIT FOR DAMAGES Vindictive Damages Ms. Soni Mr. Mahipal promise to marry Here, Ms. Soni waiting for Mahipal on their wedding day but he cheats. Soni suit a case, it seems Vindictive but she’ll get claim for the loss. cheats on wedding day a. Breach of a contract to marry.
  • 16. II. SUIT FOR DAMAGES vii. Nominal damages: sometimes, an aggrieved party suffers no real loss but the court awards him nominal damages, say Rs. 1, just to show that court favors innocent party. Mr. Sanju Bay-Car Dealer Promise to buy car Here, Sanju failed to keep his promise.The demand of car was more than supply so the dealer lost nothing on this contract. failed to buy
  • 17. II. SUIT FOR DAMAGES viii. Mitigate (reduce) of damages: to measuring the damages , injured party has to prove two things:- Ms. Sania Mr. Mirzya Loss of 50k claimed reduce to 20k a. He has suffered a loss due to Breach of a contract. b. He has taken all reasonable steps to minimize the loss. Here, Mirzya proves that Sania could mitigate it by 20k, then he has to compensate only 30k, in this case.
  • 18. II. SUIT FOR DAMAGES x. Loss of reputation: general people can’t go in the court for claiming compensation for the damages for loss of reputation but a businessman can & the court may award damages. Eg:- dishonor of Cheque. ix. Cost of Suit/Decree: when aggrieved party wins the case then it will not only gets the compensation against loss but also liable to claim its ‘Cost of Decree’ (documentation expenses, that arise during the case) & ‘Cost of Suit’ (like: lawyer’s fees, this depends upon the judge in some cases). (Decree – court orders)
  • 19. II. SUIT FOR DAMAGES xi. Inconvenience/discomfort: when breach cause physical harm & defaulting party knew that the breach would cause mental sufferings. Photographer Mrs. Mayuri (bride) Booked for wedding Unable to come Here, Mrs. Mayuri bought an action & entitled to damages for her injured feelings.
  • 20. II. SUIT FOR DAMAGES xii. Difficulty in assessment: just having difficulty in assessment does not relieve the defaulting party from the obligation to pay the damages, court should somehow estimate loss. End of Part - I