Remedies for Breach of Contract

Whenever contract is breached by one of the Party in a contract, the other party comes
across some suffering. The Contract act has given certain rights to such suffering party.
Those rights are called remedies for breach of contract which are mentioned below:

What are the remedies for breach of contract

 Right to sue for Damages.

 Rights to sue for Specific Performance.
 Rights to sue for Injunction Order.
 Rights to sue for Quantum Meruit.
 Rights to sue for Recession of Parties.
 Right to sue for Damages

Different types of Damages

Damages in legal terms called Compensation. Whenever one of the party in the Contract
comes across breach of Contract, the other party rights to sue for damages.

Types of Damages in Contract Law

The term damages is to be understood as Compensation. Whenever one of the party in
the Contract comes across breach of Contract, the other party has some rights. Out of
those rights, they has the right to sue for damages i.e. damages for breach of contract.
The objective of court in arranging for compensation is to bring the situation as if there
is no Contract between the parties. The following are different types of damages in
contract law.

1. General Damages
2. Specific Damages
3. Nominal Damages
4. Vindictive Damages
5. Liquidated Damages.

General Damages
The loss arising out of breach of Contract Can be divided into two parts, namely direct
loss and indirect loss. If only direct loss is compensated it is called general damages.

 Hobbs Vs London and South Western Railway Company.

Specific Damages
In case where indirect loss also is compensated besides loss, it is called Specific
Damages. To get specific damages, concerned special situation must be communicated.

 Simpson Vs London and North Western Railway Company.

Nominal Damages
At times, on account of breach of Contract, the other party may not come across any loss.
Though it is the situation, the other party can file a Suit. Then Court decides a very little
amount of Compensation. It is called nominal damages. Generally this type of damages
will be fixed in case of anticipatory breach.

Vindictive Damages
It is otherwise known as penalty damages. Here Contract will be breached by one of the
parties and the other party comes across heavy suffering which cannot pressured in the
form of money. Then Court decides heavy amount as Compensation. This type of
damages will be decided on the following occasions.
Breach of marriage agreements and Wrongful dishonor of Cheque by
banker.

 David Son Vs Barclays Bank.

Liquidated Damages
It is otherwise known as predetermined damages. The terms of Contract determine the
amount of Compensation.

 Dunlop Pnumatic Tyre Company Vs New Garage and motor Company.

Rights to sue for Specific Performance

At times the suffering party may file a suit claiming specific performance form the party
which has breached the contract. But this type of suit very rarely becomes successful. The
following are some circumstances where suit for specific performance will not be taken
into consideration.

 Example 1: When performance depends upon personal talent and the party has
list Such talent.
 Example 2: When court thinks that it is just and equitable to arrange for
compensation.

Rights to sue for Injunction Order

The order issued by court restrict in a person from doing a particular thing is called
injunction order. Upon breach of contract the suffering party may proceed legally for
injunction order.

 Barner Bros.Vs Nelson.

Rights to sue for Quantum Meruit

Whenever a party performs the contract partially and then the other party breaches the
contract, Suit can be filed claiming proportionate remuneration. It is called suit for
quantum meruit.

 Flanch Vs Karlbarn.

Rights to sue for Recession of Parties

At times, the suffering party may sue for recession for contract.
Termination of Contract
Contract creates relation between the parties and binds them over. Termination of such
contractual relations is called discharge of contract. The following are different modes of
discharge or termination of contract.

1. Discharge by Performance.
2. Discharge by Breach of Contract.
3. Discharge by Impossibility.
4. Discharge by Operation of Law.
5. Discharge by Lapse of Time.
6. Discharge by Mutual understanding or by Agreement.

Discharge of contract by Performance

As said by Salmond, contract creates obligations to parties. If both parties perform their
contractual obligations promptly, the contract is said to be discharged by performance. It
is the ideal method that number of contracts gets terminated in this way.

Discharge of contract by Breach

Failure in performance of contractual obligation is called breach of contract. Discharge
of contract takes place by breach of contract also. Breach of contract is of two types.
Namely;

 Actual breach and

 Anticipatory breach.

In case where contract is breached by party on the date of performance, it is called actual
breach. If breach of Contract takes place before data of performance, it is called
anticipatory breach.

Discharge of contract by Impossibility

The element of impossibility terminate contractual relations which is of two types.

 Pre Contractual impossibility and

 Post Contractual impossibility.

Initial impossibility or pre-contractual impossibility exists at the time of making a

contract. ... Known impossibility: It means one or both the parties have knowledge that a
promise to perform is impossible even though they enter into an agreement.
Supervening impossibility or post contractual impossibility is the impossibility arising
after the formation of a contract. However, this arises at the time when the promisor's
performance is due. Such impossibility usually arises due to facts that the promisor had no
reason to anticipate and did not contribute to the occurrence of.

Discharge of contract by lapse of time

Limitation act has specified duration to perform different contracts. The duration thus
specified is called limitation period. Soon after expiry of limitation period, the contract
gets discharged.
Discharge of contract by Operation of law
By Death: Whenever one of the parties comes across death, contractual relations will
come to an end.

By Insolvency: When one of the parties to the contract becomes insolvent, he forgoes
capacity to contract and those contracts which were made by that person will get
discharge.

By lunacy: When one of the parties gets attached by lunacy discharge of contract takes
place.

Right and liability going into the hands of same party: Contract creates right to
one party and liability to the other when right and liability reach the same person, the
result is discharge of contract.

Discharge of contract by Agreement

Discharge by Novation (substitute a new contract in the place of original contract),
rescission (rejection of one or all the terms of contract)or alteration (material
changes in terms of written contract) of a contract under CS (OS) No. 850/2007 Page 21 of
37 Section 62 of the Indian Contract Act can only be done with the agreement of both the
parties of a contract. Both the parties have to agree to substitute the original contract with a
new contract or rescind or alter. It cannot be done unilaterally.
Discharge By Merger :-
When you merge the smaller contract in the larger contract it is called merger. The smaller
contract is discharged by law automatically.
Discharge By Consent :-
A contract may be terminated with the mutual consent of the contracting parties.
Discharge By Remission :-
Remission means pardoning of offense or cancelling of the whole or any part of some
obligation.
Discharge By Waiver :-
It means to relinquish the claim or right. Sometimes promisee himself surrenders his rights
to the contract and releases the promisor from his obligations.

Quasi Contracts
In case of Quasi Contract, there will be no offer and no acceptance either on express base
or on implied base. But under certain circumstances Court creates contract between the
parties artificially and thus binds over the parties. Such contracts which are created by
virtue of law are called Quasi Contracts. Section 68 to 72 of Contract Act read about the
situations where court can create Quasi Contract.

Section 68 - when necessaries are supplied: When one party supplies necessaries
to the other (without request), a quasi contract comes into force.

 Chaval Vs Cooper.

Section 69 - When expenses of one person are paid by the other: When
expenses which are to be paid one party are paid by another party, the parties are said to
be under quasi contract.
  Hazarilal Vs Navaranglal.

Section 69 and thus capacitates B to recover that amount from A.

Section 70 - When one party is benefited by the activity of another party:

When one party conducts an activity and its benefit is attained by another party, then
also Court can create a quasi Contract.

 DamodarModaliar Vs Secretary of State for India.

Section 71 - In case of finder of lost goods: Court can create a quasi contract in
case of finder of lost goods.

 Hallius Vs Fowler.

Section 72 - When payment is made by mistake: Whenever payment is made by

mistake or goods are delivered by mistake, Court can create a quasi Contract.

 Khaniyalal Vs Sales Tax Officer of the Banaras.