MEANING OF BREACH OF CONTRACT

When either of the parties doesn’t

Perform his/her obligation as per
the contract is the breach of contract.

TYPES OF BREACH OF CONTRACT

a)ACTUAL BREACH OF CONTRACT:
The breach of contract in which the parties
declares his/her unability to perform as per the date
of performance or during the course of performance
or the due date is the actual breach of contract.
 Types of Actual Breach of Contract
1. On the due date of Performance:
If any one of the party to
contract refuses or fails to perform his part of the
contract at the time fixed for performance, it is
called breach of contract on the due date of
performance.
2. During the course of performance:
If any party has performed a
part of the contract and then refuses or fails to
perform the remaining part of the contract it is
called as the breach of contract during the course
of performance.
• EG. (1): Nike vs Virat Kohli (Sept 2013)
Nike India has sued its long time brand ambassador Virat
Kohli, alleging breach of contract of an endorsement contract. In its
suit, Nike claimed Kohli had breached the contract by disagreeing to
continue as its brand ambassador till 2014. The five-year contract
from 2008 and was extendable by one year.
Nike had entered into a contract with Virat Kohli from
Aug.1,2008 till july 31,2013 for exclusive endorsement rights. Virat
kohli was paid Rs.1.42 crore for this contract that carried a clause
for extension for another year, till july 31 2014 with certain
conditions.
While planning to extend the contract and also sign Kohli
beyond 2014, Nike was shocked to receive letter from Kohli on june
6 2013. The super giant claims that kohli “made certain self serving
and baseless allegations with respect to implementations of the
contract” and rejected its extension through the letter.
 The firm also alleges that kohli’s action was result of non-
acceptance of his unilateral and unreasonable terms suggested by
him earlier.
Nike , in its suit, has pleaded with the court to restrain (Suit
for injunction) Kohli from entering into or negotiating any
endorsement deal with any third party until the expiry of the deal.
The company also held the right to claim damages of an unlimited
amount , said a source.
 EG.(3): KUAN VS CARGILL
• Global commodities trader Cargill Inc [CARG.UL] has sued a former employee,
accusing him of stealing trade secrets before he joined rival JBS SA.
• Privately held Cargill filed the case on Thursday in the U.S. District Court of Colorado,
accusing Jason Kuan of breach of contract.
• Kuan resigned on Aug. 1 without prior notice.
• Kuan had worked for Cargill's Case Ready business, which is involved in processing
and packaging meat for retailers.
• He joined JBS, the world's biggest beef producer in early August, after working for
Cargill for about 20 years.
• According to the lawsuit, the company found Kuan's resignation suspicious and
conducted a forensic analysis on Kuan's laptop, which was owned by Cargill.
• The analysis showed that Kuan "downloaded hundreds of highly confidential and
proprietary Cargill Case Ready files to an external hard drive."
• It claims that the hard drive was not returned to the Minneapolis-based company
upon Kuan's resignation.
• Kuan will lead JBS' new stand-alone Case Ready Division, according to an
announcement by JBS cited in the lawsuit.
• "Kuan will inevitably disclose and use the valuable Cargill information in the course of
his employment position with JBS because he is developing a Case Ready meat
business for JBS; this is the same industry and the same type of position Kuan had for
many years at Cargill," the company said.
• Neither Cargill nor JBS could immediately be reached for comment outside normal
business hours.
EG.(4): MICROSOFT VS SAMSUNG
Samsung and Microsoft are both large and sophisticated companies.
In 2011, after months of painstaking negotiation, Samsung voluntarily entered
into a legally binding contract with Microsoft to cross-license IP – an agreement
which has been extremely beneficial for both parties. Samsung had been
complying with the contract and paying to use Microsoft's IP.
Since Samsung entered into the agreement, its smartphone sales
have quadrupled and it is now the leading worldwide player in the smartphone
market. Consider this: when Samsung entered into the agreement in 2011, it
shipped 82 million Android smartphones. Just three years later, it shipped 314
million Android smartphones. [Source: IDC, WW Quarterly Mobile Phone Tracker
– 2014 Q1, Published: May 2014] Samsung predicted it would be successful, but
no one imagined their Android smartphone sales would increase this much.
After becoming the leading player in the worldwide smartphone
market, Samsung decided late last year to stop complying with its agreement
with Microsoft. In September 2013, after Microsoft announced it was acquiring
the Nokia Devices and Services business, Samsung began using the acquisition as
an excuse to breach its contract. Curiously, Samsung did not ask the court to
decide whether the Nokia acquisition invalidated its contract with Microsoft,
likely because it knew its position was meritless.
Microsoft and Samsung have a long history of collaboration.
Microsoft values and respects our partnership with Samsung and expects it to
continue. We are simply asking the Court to settle our disagreement, and we are
confident the contract will be enforced."
 b) ANTICIPATORY BREACH OF CONTRACT
The breach of contract in which the either of the
parties expresses in advance his/her unabililty to
perform the task/work as per the contract is called as
the anticipatory breach of contract.
EG.(5): Steve Vs Comp co
In April, Steve orders 100 computers from Compco.
He is supposed to pay $50,000 on May 1 and receive the
computers on July 1. On April 29, Compco's CEO tells
"Unless chip production increases, Compco may have
trouble filling its summer orders." Steve demands an
assurance from Compco and withholds payment of the
$50,000 due on May 1. When Compco hasn't responded
to Steve's request for assurance by the end of the
month, Steve terminates the contract.
EG.(6): John Vs Bob
John owns a large fleet of classic cars and decides
to sell one of the cars to Bob. John and Bob enter into a contract in
which Bob agrees to purchase the car for $50,000 on January 1st.
On December 29th, Bob calls John to say he will not be able to
come up with the entire purchase price of $50,000 by the set date.
Since direct communication took place, John can reasonably
determine that Bob is in anticipatory repudiation, or will breach the
contact, releasing him from his duty to hold the vehicle. John can
now sell the car to another party, or file a lawsuit against Bob for
breaching the contract.
REMEDIES FOR BREACH OF CONTRACT
a) Suit for rescind the contract:
When there is a breach of contract done by any of
the parties the either of the parties can terminate and
discontinue to perform the contract.
Eg. 5 is the best examples for recession of contract.

b) Suit for Damages:

Damages are monetary compensation given to the
injured or agrieved party for the loss or injury suffered by
him as a result of the breach of contract.
There are 4 types of damages :
1. Compensatory damages( Loss or cost directly caused
to the agrieved party due to the breach of contract.)
2. Consequential damages
3. Punitive damages
4. Nominal damages( In this the parties don’t have any
monetary loss but has only technical injury and in this
nominal losses is beared by the parties to compensate
others.)

Eg. 1 is the best illustration for the breach of contract in which

suit for damages can be made by the agrieved party.
c) Suit for quantum meruit:
Quantum meruit means “claim for as much as
earned or performed”. In this if the party was able to
perform some part of the whole work and due to some
issues and reasons there is breach of contract and if the
work got stopped in the middle ,the agrieved party can
claim for the loss beared to him or the total real work
done by the party .
Eg. The best example of this can be real estates in
which the contractors make agreements for making of
apartments but due to misconduct of partners the
contract is terminated and the contractors who involved
in building the house suit for quantum meruit in which
he can claim for as much of the work done or performed
by him in building.
d) Suit for injunction:
Injunction is the legal obligation or decision
made by the legislative body ie courts of any country
taking consideration of the types of breaches he/she
made. In this, order is given by court for restraining a
person from doing a particular act if he/she really
breached the contract. In this a party is obligated to
perform with only to whom the contract is made not
with his/her competitors or any one else.
Eg 5 can be the best illustration in which court
issued the notice to kohli to entact as per the
contract .
e) Suit for specific performance:
Specific performance means carrying out
work as per the agreed in contract. In this the
agrieved party can suit for specific performance and
make them to actually perform the work that he has
made. Such suit may be filed either instead of or in
addition to a suit with the damages depending upon
the nature and losses beared by the agrieved party.
In this case eg. 5 can be the best illustration
since in which kohli may be entitled to perform
specific work .