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Remedies for Breach of Contract

A contract creates obligations enforceable at a Court of Law. Therefore if a party to the


contract fails to perform its part, the other party has a right to move to the court of law for
enforcing the contract.

Remedies for breach of Contract

1. Right of rescission
2. Right to claim damages
3. Quantum meruit
4. Specific Performance
5. Injunction order

The aggrieved party has the following rights at the discretion of the court:

1. Right of rescission: When one party to the contract breaches the contract, the other
party need not perform his part of the obligations. The aggrieved party may rescind
the contract. In such cases, the aggrieved party can either rescind the contract or file
a suit for damages.
The rights of rescission are lost in the following cases:-
 Where the party waives its right to rescind, the right of rescission is lost.
 Where the contract is not divisible and the party wants to rescind only a part
of the contract
 Where the parties cannot be placed in the same position in which they were
before the breach took place. Eg subject matter is destroyed or consumed
 Where in the mean-time, third parties have acquired interest bonafide and
for value

2. Right to claim compensation or damages: Section 73 provides that when a contract


has been breached, the aggrieved party of the contract is entitled for monetary
compensation. The objective of Suit for damages is to put the aggrieved party in
such a position in which he would have been had there been performance and not
breach. The suffereing party must be able to prove the actual loss or else no
damages will be awarded.
Damages can be of 4 types:
i. Ordinary damages: These are the damages which are awarded for
compensating the loss arising directly and naturally as a result of breach of
contract.
ii. Special damages/ particular damages: arise because of remote or indirect
loss arising out of a breach of a contract. Such damages can be claimed by the
aggrieved party only if both the parties reasonably contemplated or expected
that such damages will arise.
iii. Exemplary, vindictive damages: When the breach of a contract by one party
not only results in monetary loss to the aggrieved party but also subjects him
to mental suffering, the need for exemplary damages arises. The main aim of
awarding such damages is to deter a person from committing a breach of
such contract.
iv. Nominal damages: These damages are awarded simply to recognise the right
of the party to claim damages for breach of contract.

3. Quantum Merit: The Latin maxim Quantum merit means – as much as is merited i.e.
in proportion to the extent of the work done. A claim may be allowed by the court
where the aggrieved party has performed the contract and is prevented by the other
party from performing the remaining contract for the proportion of work done or
goods supplied.

4. Suit for specific performance: The suit for Performance is regulated by the specific
relief act,1963. Specific performance means the actual carrying out of the contract as
agreed. The court may grant for specific performance where it is just and equitable
to do so. Specific Performance may be granted under the following grounds:
 Lack of standard for ascertaining the damages
 Where compensation is not adequate relief
 Substantial work has been done by the plaintiff

The court cannot grant the remedy of specific performance in the following
situations:

 Where monetary compensation is an adequate relief


 Where the court cannot supervise the actual execution of the work
 Where contract is for personal services
 Where the Contract is not enforceable by either party against the other

5. Suits for injunctions: Injunction is an order of the Court restraining a person from
doing a particular act. Where the defendant is doing something which he has
promised not to do, then the injured party will get a right to file a suit for injunction.