Remedies for Breach of Contract

A Legally binding Agreement. In other words, a Contract is an Agreement, the purpose of which is to create a Bond. Thus, when a Contract allows a person to force another person to do something or to avoid doing something, it is called a Contract.

What is a Breach of Contract?

A Contract may be terminated or broken when one of the parties fails or refuses to fulfil his or her obligations, or his or her promise under the Contract. Therefore, it can be said that when a binding Agreement is not honoured by one or more parties for not fulfilling his promise, the Agreement may be terminated.

Introduction

The parties to the Contract are Legally required to perform their duties respectively, so naturally, the law does not deal with violations of any party. Therefore, once one party violates an Agreement, the law provides for three other Remedies. He may want to find out:

• Ongoing loss injuries, or

• The law of some practice, or

• Instruction.

The laws relating to civil proceedings are governed by the Contracts Act, while the rules relating to orders and certain functions are governed by the Special Benefit Act, 1963.

Remedies for Contract Violations

If a promise or Agreement is broken by any parties involved we call it a Breach of Contract. Therefore if one of the parties does not comply with the terms of the Agreement or does not fulfil its obligations under the terms of the Contract, that is a Breach of Contract. There are several Remedies for Contract Breach available from the Victim. Let's take a look.

Contract Reduction

If one of the Contractors does not fulfil his or her obligations, then the other party may withdraw the Contract and deny the performance of his or her obligations.

In terms of section 65 of the Indian Contract Act, a company that rescinds a Contract must repay any benefits received under the specified Agreement. And section 75 states that the entity withdrawing a Contract is entitled to claim damages and/or compensation for such Recession.

Sue for Damages

Section 73 makes it clear that the Victim as someone who has broken a promise may claim compensation for loss or damages incurred in the normal course of business.

Such damages will not be paid if the loss is not natural in nature, i.e. not in the normal course of business. There are two types of damage in terms of the Act,

• Discontinued Damage: Sometimes Contract parties will agree to the amount payable in the event of a Breach. These are known as liquidated damages.

• Unintended Injury: Here the amount payable for Breach of Contract is assessed by the courts and any other relevant authorities.

Sue for Specific Performance

This means that the offending party will have to do its job Contractually. In some cases, the courts may insist that the party enter into an Agreement

Injunction

An order is basically the same as the law of a particular operation but of the opposite Contract. An order is a court order that prohibits a person from committing an act.

So the court may issue an injunction suspending the Contractor from doing something he has promised not to do. In a restraining order, the court suspends the action and by order, will suspend the continuation of the illegal act.

Quantum Meruit

Quantum meruit means "earned money". Sometimes when one part of a Contract is prevented from completing its Contract performance by another, it may require quantum suitability.

So he should be paid a fair wage for part of the Contract he has made. This could be the reward for the work he did or the amount of work he did.

Parties to a Contract area are unit duty-bounded to perform their guarantees. However, things arise wherever one among the parties to a Contract could break the Contract by refusing to perform his promise. This can be what's referred to as the Breach of Contract. Once one party commits a Breach of Contract, presently the opposite party is entitled to the subsequent Remedies. When one among the party commits a Breach of the Contract, the opposite party becomes entitled to any of the subsequent reliefs:

• Rescission of the Contract

• Damages for the loss suffered

• Suit for the precise performance

• Suit upon quantum meruit

• Suit for the injunction

Rescission of the Contract

When one among the parties commits a Breach of Contract, another party shall additionally treat the Contract as void or cancel. Once the Contract is cancelled, the affected party is mechanically discharged from all the commitments beneath the Contract. Section 64 of the Act provides that the party cancel the Contract if he has received any profit under it from the opposite party; restore such profit to the person from whom it had been received. Further, the one that truly cancels the Contract is entitled to compensation for any loss that he faced from the non-fulfilment of the Contract.

Damages for the Loss Suffered 

The term “Damages” means that financial compensation collectable by the defaulting party to the affected party for the loss suffered by him once the Contract was broken. Therefore, the aggrieved party could bring associate action for damages against the party who are guilty of the Breach of Contract. The party is guilty of the Breach and is vulnerable to pay damages to the aggrieved party.  

Types of Damages

1. Normal Damages or General Damages

Damages that arise within the normal course of events from the Breach of Contract are referred to as normal damages.

2. Special Damages

Special damages are those damages that are collectable for the loss arising on account of some special or uncommon circumstances. That is, they undue the natural and probable consequences of the Breach of the Contract.

3. Exemplary or Vindictive Damages

These damages are awarded against the party who has committed a Breach of the Contract with the thing of gruelling the fallible as a defaulting party and to compensate the aggrieved party. Generally, these damages are awarded just in case of action on loss

4. Nominal Damages

These damages are in little quantity. They’re awarded merely to acknowledge the correctness of the party to say damages for the Breach of the Contract. Sometimes, the damages aren't associated with an adequate remedy for Breach of the Contract. In such cases, the Court could, at the suit of the party not in Breach, direct the party in Breach to hold out his promise as per the terms of the Contract. This can be referred to as the precise performance of the Contract.

Example: A united to sell associate previous stamp of the pre-independence amount to 8 for Rs.500. However, afterwards refused to sell it. During this case, B may file a suit against A for the precise performance of the Contract and therefore the Court could order A to sell the stamp to B as united.

Some of the Cases Wherever the Court Could Direct the Execution Area Unit as Follow

• Once the act is done, compensation in cash, for its non-performance, couldn't afford adequate relief.

• Once there exists no normal for crucial the particular damages caused thanks to the non-performance of the Contract.

However, Execution Shall Not Be Granted Within the Following Cases

• Wherever the damages are associate adequate relief,

• Wherever the Contract is calculable.

• Wherever the Contract involves personal nature.

• Wherever the Courts cannot supervise the effecting of the Contract.

• Wherever the Contract isn't truthful and simple.

Suit upon Quantum Meruit

In a literal sense, the expression “Quantum Meruit” means that, “as very much like attained “. In an exceedingly Legal sense, it means that payment is in proportion to the work done. This principle provides for the payment of compensation under certain circumstances, to someone who has offered the products or services to the opposite party under a Contract,  which couldn't be performed under certain circumstances.

Cases for Claim on Quantum Meruit

Wherever the work, that has been done and accepted under Contract, is afterwards discovered to be void – Here the party has affected a part of the Contract will truly the quantity for the work he has done. And therefore the party that accepts and reaps the profit under Contract, should create compensation to the opposite party.

• Wherever one party abandons or refuses to perform the entire Contract. Here the compensation for the work done could also be recovered supporting quantum meruit.

• Wherever one thing is finished with non-intention to try and do gratuitously. In such cases, the opposite person is certain to create the payment if he accepts such services or merchandise, or enjoys their profit.

• Wherever the Contract is cleavable and therefore the party has enjoyed the advantages of the work done – In such cases, the halfway in default could sue on quantum meruit if the opposite party has enjoyed the advantages of the part performance.

Suit for Injunction

The term” Injunction” could also be outlined as an associate order of the Court instructing someone to refrain from doing a little act that has been the subject-matter of the Contract. wherever a celebration has secured to not do one thing and he will it, and thereby commits a Breach of Contract, the aggrieved party could ask for the protection of the Court beneath sure circumstances and procure associate injunction.

Example: A narrowed to sing solely at B’s theatre and obscurity else for an exact amount. Afterwards, A created a Contract with C to sing at C’s theatre and refused to sing at B’s theatre. The Court refused to order a selected performance as a result of the Contract was private however granted an associate injunction against A to restrain him from singing anyplace else.