Remedies For Breach of Contracts

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Remedies for Breach of

Contracts
Introduction
 Where one party fails to fulfill the obligations
made in contract or does not perform
intentionally or does not perform in accordance
with the terms made in the agreement is said to
be breached the contract.
 In case of breach of contract, many people think
that damages are the only available remedy
available but there are many remedies which
may sort by the aggrieved party or the party
who had suffered loss.
 In many commercial agreements or contracts,
they contain the express provision for remedies.
In case of no express provision than the
following remedies are always available.
 Rescission of the contract: where one party
promises to do some act but he fails to do so,
therefore, the other party or the party
aggrieved may sue for such to treat the contract
as rescinded along refuse further performance.
 Here the aggrieved party will be free from all
obligations as the other party failed to fulfill his
contractual obligations.
 Sue for Damages:
 Sec. 73 states that the party who has suffered,
since the other party has broken promises, can
claim compensation for loss or damages caused
to them in the normal course of business.
 Such damages will not be payable if the loss is
abnormal in nature, i.e. not in the ordinary
course of business.
 There are two types of damages according to
the Act:
 Liquidated Damages: Sometimes the parties to a
contract will agree to the amount payable in case
of a breach. This is known as liquidated damages.
 Unliquidated Damages: Here the amount
payable due to the breach of contract is assessed
by the courts or any appropriate authorities.
 In the case of Harley vs. Baxendale (1854) 9 Ex.
341 it was observed that the damages which
ought to have received should be as much fairly
and reasonably.
 Quantum Meruit: Quantum meruit literally
translates to “as much is earned”. At times when
one party of the contract is prevented from
finishing his performance of the contract by the
other party, he can claim quantum meruit.
 So he must be paid a reasonable remuneration
for the part of the contract he has already
performed. This could be the remuneration of
the services he has provided or the value of the
work he has already done.
 Sue for Specific Performance
 This means the party in breach will actually have
to carry out his duties according to the contract. In
certain cases, the courts may insist that the party
carry out the agreement.
 So if any of the parties fails to perform the
contract, the court may order them to do so. This
is a decree of specific performance and is granted
instead of damages.
 For example, A decided to buy a parcel of land
from B. B then refuses to sell. The courts can order
B to perform his duties under the contract and sell
the land to A.
• Injunction: An injunction is basically like a decree
for specific performance but for a negative
contract. An injunction is a court order
restraining a person from doing a particular act.
• So a court may grant an injunction to stop a party
of a contract from doing something he promised
not to do. In a prohibitory injunction, the court
stops the commission of an act and in a
mandatory injunction, it will stop the continuance
of an act that is unlawful.
 Suit for Rectification or Cancellation of
Contract:
 This is another sort of remedies in case of breach
of contract. When by Fraud from the opposite
party or through the mutual mistake of both
parties a contract does not express their real
intentions than the aggrieved party or both
parties may apply for the rectification of the
contract under section 31 of the Specific Relief
Act, 1877.
 It was held in the case of Lalbanu Bibi vs.
Nourjan Banu 41 DLR 519 that the court will
rectify the contract where the real intention is
misrepresented.
 On the other hand where it is found that a
contract which is void or voidable against a
person and may cause serious injury to him or if
a reasonable apprehension occurs of such than
he may file a suit for the cancellation of the
contract under section 39 of the Specific Relief
Act, 1877.
 In the case of Chitta Ranjan Chakraborty vs. Md.
Abdur Rob 1997 BLD 126 stated that when a
contract is void ab initio and the transaction is a
nullity or only voidable than the plaintiff may ask
for relief under section 39 of the Specific Relief
Act for the cancellation of such.
 From the above discussion it can be said that the
remedies in case of breach of contract is a civil
one and suit much be filled in the ordinary civil
court before the time limit lapses.
 It is to be noted that the limitations for bringing
a suit in case of specific performance of
contract are only one year as per article 113 of
the Limitation Act, 1908. The aggrieved party
may bring a suit for availing any of the above-
mentioned remedies but it would be better to
consult expertise or lawyer for availing the
better remedies.
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