Chapter – 6

Remedies for
Breach of Contract

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 This chapter contains
1. Introduction

2. Remedies available for breach of contract

i. Suit for rescission
ii. Suit for damages
Kinds of damages
a) Ordinary damages
b) Special damages
c) Exemplary damages
d) Liquidated damages
e) Nominal damages
iii. Suit upon Quantum Meruit
iv. Suit for specific performance
v. Suit for injunctions

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Introduction
 Contracts are made for being
performed. But there are certain
circumstances when one of the
parties does not perform his part of
the contract.

 This non performance is called the

Breach.

 When there is right there is a

remedy.

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Introduction
 Remedy generally means ‘Redress
or relief’. It is compensation for a
wrong.

 Oxford Dictionary of Law defines

‘Remedy’ as “any of the methods
available at law for the enforcement,
protection, or recovery of rights or for
obtaining of redress (compensation)
for their infringement”.

 It is also called ‘Judicial Relief’

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 Continues …
 When a party breaks the contract by
refusing to perform his/her promise, the
breach takes place., and the party is
known as Guilty party, and the effected
party is called as aggrieved party. Then
there are some remedies available for the
aggrieved party against the guilty party.
they are as following ..

1. Suit for Rescission

2. Suit for Damages
3. Suit for Quantum Meruit
4. Suit for Specific Performance
5. Suit for Injunction
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1 - Suit for
Rescission

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 1- Suit for Rescission
 Rescission means cancellation of a
contract. When one of the parties breaks
the contract, there is a breach, then
another party is released from his
obligations under the contract, and the
contract is discharged, he may sit at
home quietly. But if he (the aggrieved
party) wants to sue the guilty party for
damages for breach of contract, then he
must first sue for the rescission of a
contract, when the court grants him
formal rescission then he becomes
entitled to compensation.
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Example
 ‘Imran’ contracts to supply 500 bags
of cement to ‘Farman’ on 20th May
2012, and ‘Farman’ agrees to pay on
delivery. ‘Imran’ does not supply on
due date. ‘Farman’ is discharged
from liability to pay. If ‘Farman’
wants to claim damages for the
breach of a contract then he first sue
for rescission of a contract, and when
the court grants him formal
rescission then he is released from
liabilities and entitled to sue for
damages.
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2 - Suit for
Damages

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2- Suit for Damages
 ‘Damages’ are the monetary
compensation claimed, and
awarded by the court, to the
injured party for the loss
suffered by him as a result of
the breach of contract.

 It is the sum of money which

the aggrieved party is entitled
to receive from the wrongdoer
as a compensation for the
wrong. 10
 Continues ..
 When any of the parties to the
contract breaks the promise then
the injured (aggrieved) party can
sue him for damages. He can
claim following kinds of
damages depending upon the
circumstances of the case.
1. Ordinary damages
2. Special damages
3. Exemplary damages
4. Liquidated damages
5. Nominal damages
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1- Ordinary Damages
 Ordinary damages are also
known as General Damages.
When a contract is broken the
aggrieved party can recover
ordinary damages from the
guilty party. Ordinary damages
are usually assessed on the
basis of actual loss. Such loss
would be called ordinary or
general loss.

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 Continues ..

 In a contract of Sale of Goods,

the damages payable, are, the
difference between the contract
price and the market price at
the date of breach.

 Such damages are not to be

given for any remote and
indirect loss sustained by the
reason of breach.

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2- Special Damages
 Special damages are those resulting
from a breach of contract under
some special or particular
circumstances.

 These damages include indirect loss

which arise due to the breach of
contract.

 The parties to the contract must be

aware of the loss which may arise
from the breach.
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Example - 1
 ‘Saleem’ contracts ‘Junaid’ to buy
1 ton of iron for Afs. 80,000.
Saleem also contracts to sell
Sahib Gull 1 ton iron for 1 lac
Afs. Saleem informs Junaid about
the purpose of a contract. Junaid
fails to supply. As a result
Saleem cannot supply to Sahib
Gull. Junaid is laible for loss of
profit which Saleem would have
earned from Sahib Gul.
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Example - 2
 ‘Fardeen’ delivered his samples to
Gulzar & Co. for exhibition at Peshawar.
He wrote on consignment (an amount of
goods that is sent somewhere) “must be at
Peshawar on Monday 11th of June 2012
certain”. Due to negligence goods
reached after the show. Though the
company was aware of the object of
carrying the goods.

 Held that “Fardeen” was entitled to

claim for special damages.

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3 – Exemplary Damages
 When the breach of contract
results not only in monetary loss
but causes disappointment to the
aggrieved party then exemplary
damages are awarded to him.

 The object of awarding Exemplary

Damages is to punish the guilty
party on one hand and to deter
him and others from similar
conduct in the future on other
hand.
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 Cases in which Exemplary
damages are awarded
 Exemplary damages are claimed in
the following cases
1. In case of breach of contract to
marry, the amount of damage
depends upon the extent of injury
to the feelings of the party.
2. In case of dishonor of the cheque
by bank when there are sufficient
funds to the credit of the
customer.
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Example
 Azizi Bank promised to give
loan to Amjad for trip to USA
by crediting his account. Bank
fails to do so and Amjad
cheque was dishonored. The
court allowed damages for
the emotional distress to
Amjad.

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4 – liquidated Damages
 When parties to a contract fix the
amount of damages for the breach of
contract at the time of formation of
contract. Such damages are called
liquidated damages.

 Whereas sum is agreed in the

contract to be paid by the defaulting
party, in case of breach of contract,
the court of law will allow the
reasonable damages, not exceeding
the amount already agreed.

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 Continues …
 If the actual loss is more than
the agreed amount, even then
damage will be payable to the
agreed amount.
Example
• Shamsher Stanakzai contracts to
pay Afs. 10,000 as a damages to
Farhad Saafi if he fails to pay
him Afs. 5 lac on given day.
Stanakzai fails to pay on that
day. Saafi can recover damages
not exceeding Afs. 10,000.
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5 – Nominal Damages

 Nominal damages are

allowed when no loss has
actually occurred. The
object of such types of
damages are not to
compensate the aggrieved
party or punish the guilty
party but awarded in the
recognition of rights.

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Examples
 Sulaiman Siddiqui promises to sell cement
to Walid for Afs. 250 per bag. Sulaiman
Siddiqui does not supply in time. A
contract is breached but the market rate
of cement is same. Sulaiman Siddiqui is
entitled to nominal damages.

 Maryam Sharifi contracts to buy a Honda

accord car from Haleem a car dealer, and
later on refuses to buy. Haleem sold the
same car to another customer and
suffered no loss. Haleem sued for
damages and the court allowed him
nominal damages.
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 3 - Suit for
Quantum Meruit

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3 – Quantum Meruit

 The expression Quantum

Meruit literally means “as
much as earned”.

 Generally it refers to the

payment in “proportion to
the work done” or
“reasonable value of the
work done”.

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 Continues …
 When a person has done
some work under a contract
and the other party cancels
the contract or an event
happens which makes the
performance of the contract
impossible; such party can
claim remuneration for the
work already done.

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Example

 ‘A’ contracts to build a 3

storey house for ‘B’.
When one storey is
complete, B stops ‘A’ for
work. ‘A’ can claim for
compensation for the
work done. In other
words he can file suit for
Quantum Meruit.
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 4 - Suit for
Specific Performance

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Specific Performance
 Specific performance means
‘actual carrying out of the contract
by the party’.

 In some cases where the damages

are not an adequate remedy, the
court may direct the guilty party
to fulfill the contract.

 The aggrieved party can sue for

specific performance.

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Example
 A agrees to sell his plot to
C, who agrees to buy to
construct a mill on it. A
commits breach. ‘C’ files a
suit for specific performance
against ‘A’. The court directs
A to perform the contract.

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5 - Suit for Injunction

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5 – Suit for Injunction

 Injunction is an order of the

court restraining a person
from doing something which
he promised not to do.

 It is appropriate in cases of
anticipatory breach of
contract.

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Example
 Aryan Khan agreed to sing at
I.C Kabul for one year and for
no one else in Kabul. After
three months he contracts to
sing at Serena Kabul and
refused to sing for I.C. I.C sued
him for injunction in the court
and the court granted
injunctions to I.C for restraining
Aryan Khan to sing for Serena.
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 Exercise
1. What do you mean by the ‘Legal
Remedies’ or ‘Judicial Relief’ in case of
breach of contract? Define briefly

2. What Different types of Remedies are

available at the law for the one
(aggrieved) whose rights are affected?
Name them all.

3. What do you mean by ‘Damages’? Define

4. What are the different kinds of

Damages? just name them

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 Exercise Continues …

5. Explain the following with example

1. General or Ordinary Damages
2.Special Damages
3.Exemplary Damages
4.Liquidated damages
5.Nominal damages

6. Explain the following with example

1. Suit for Rescission
2. Suit for Quantum Meriuit
3. Suit for Specific Performance
4. Suit for Injunction

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References
 Books
1. Business Law by Khalid Cheema
2. Mercantile law by M.C Shukla

 Dictionaries
1. Oxford Law Dictionary
2. Black’s Law Dictionary
3. Qanooni Lughat by Justice Tanzil -u-
Rehman

 Websites.
1. www.thefreedictionary.com
2. www.wikipedia.com

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