Remedies for breach of contract

REMEDIES FOR BREACH OF CONTRACT , tYPES OF BREACH OF CONTRACT Ramanaujan college , university of delhi,

1. Remedies for Breach of Contract 1 RemEdies for brE Ach of contract Presented by:- Shashank singh Anjali pandey Sangeeta Pooja sharma

2. CONTENT Breach of contract. Types of Breach of contract. Remedies for breach of contract. Suit for Recession. Suit for Damages. Suit for Quantum Meruit. Suit for Specific performance. Suit for Injection. 2

3. Breach of Contract A breach of contract occurs if any party refuses or fails to perform his part of the contract. 3

4. A Breach of contract may arise in two ways , 4

5. Anticipatory Breach 5 Anticipatory Breach“ An anticipatory breach occurs when a party demonstrates his intention to break a contract ” Vocal or written confirmation is not required, Failure to perform an obligation in a timely matter can result in a breach. By declaring an anticipatory breach, the counterparty may begin legal action immediately rather than waiting until a contract's terms are actually broken. For example Rajesh Agrees To Marry Shantha , Before the date of Marriage Rajesh Heard that Shantha Going to Marry Sudharman

6. Actual Breach This may take place in any of the following two ways: 6

7. Actual Breach On due date of performance If any party to contract refuses or fails to perform his part of the contract at the time fixed for performance it is called an actual breach of contract before due date of performance 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 actual breach of contract during the course of performance 7

8. Remedies for breach of contract A legal remedy is a court order that seeks to uphold a person’s rights or to redress a breach of the law . When one party breaches a contract, the other party may ask a court to provide a remedy for the breach. The court may order the breaching party to pay money to the non-breaching party . 8

9. Types of Remedies 9 SUIT FOR RESCISSION SUIT FOR DAMAGES SUIT FOR QUANTUM MERUIT SUIT FOR SPECIFIC PERFORMANCE SUIT FOR AN I NJUNCTION

10. Suit for Recission The term Rescission refers to the cancellation of contract. In such cases, if one party has broken his contractual relations, the other party may treat the breach as discharge and refuse to perform his part of performance. Thus in case of rescission of contract, the aggrieved or injured party is discharged from all his obligations of the contract. 10

11. UNDER FOLLOWING CASES THE COURT MAY REFUSE TO GRANT RESCISSION The parties cannot be restored to their original positions due to changed circumstances. The party(s) has acquired rights in good faith and value during subsistence of contract. Only a part of the contract is rescinded and this part can’t be separated from rest of the contract. But if a person rightfully rescinded, he is entitled to compensation for any damage which he has sustained through non fulfilment of the contract by the other party. 11

12. EXAMPLE 'A' contracts to supply 10kg of tea leaves for Rs. 8,000 to 'B' on 15 June. If 'A' does not supply the tea leaves on the appointed day, 'B' need not pay the price. 'B' may treat the contract as rescinded and may sit quietly at home. 'B' may also file a ‘suit for rescission’ and claim damages. 12 A B Breach of contract when ‘A’ don’t supply to ‘B

13. SUIT FOR DAMAGES 13 Damages are a monetary compensation allowed to the injured party for the loss or injury suffered by him as a result of the breach of contract. The fundamental principle underlying damages is not punishment but to compensate the aggrieved party for the loss suffered by him in the original position as he would have been.

14. Rules regarding damages 14 The damages must naturally arise in the usual course of things from such breach i.e. the damages must be the proximate or direct consequence of the breach of contract. The aggrieved party must have suffered damages by breach of contract. Damages are awarded to compensate the loss caused by a party but not to punish the party at default for the breach of contract. Amount of damages can be decided at the time of agreement by the mutual consent of both the parties.

15. TYPES OF DAMAGES 15

16. EXAMPLE Mr. A to pay 3 lac to Mr.B on 1st April. Mr.A does not pay the money on that day. Mr. B is unable to pay her debts and suffer a loss. Mr. A is liable to pay B principal amount and also interest on it. 16 A B Breach of contract when ‘A’ don’t give money to ‘B’. Payable money

17. SUIT FOR QUANTUM MERUIT It means “AS MUCH AS EARNED” or “in proportion to the work done.” Right to ‘Quantum Meruit’ literally means a right to claim the compensation for the work already done. 17

18. EXAMPLES Mr.A engages Mr. B a contractor, to build a three storied house. After a part is constructed ‘A’ prevents ‘B’ from working any more. ‘B’ the contractor, is entitled to get reasonable compensation for work done under the doctrine of quantum merit in addition to the damages for breach of contract . 18 Breach of contract when ‘A’ told ‘B’ to stop building construction. A B

19. SUIT FOR SPECIFIC PERFORMANCE Suit for Specific performance means demanding the court’s direction to the defaulting party to carry out the promise according to the terms of contract. Cases where suit for specific performance is not maintainable Where actual damages arising from breach are not measurable. Where monetry compensation is not an adequate remedy. 19

20. Example X agreed to sell an old painting to Y for Rs50,000. Subsequently, X refused to sell the painting . Here, Y may file a suit against X for the specific performance of the contract . 20

21. SUIT FOR INJECTION It means demanding court’s stay order. An order of the court which prohibits a person to do a particular act. A party to a contract does something which he presumed not to do , the court may issue an order prohibiting him from doing so. 21

22. EXAMPLES A, a singer contracts with B the Manager of a theatre to Sing at his theatre for one year and to abstain from Singing at other theatres during the theatre. She absents herself , B cannot compel A to sing at his theatre, but he may sue her for an injunction restraining her from Singing at other theatres . G agreed to take the whole of his supply of electricity from a certain company. The agreement was held to import a negative promise that he would take none from elsewhere. He was, therefore, restrained by an injunction from buying electricity from any other company. 22

23. 23 Thank you