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Thread: the rules under which the court determine the award of damages for breach of contract

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    Moodle the rules under which the court determine the award of damages for breach of contract

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    Remedies for breach of contract
    Q. Explain the rules under which the court determine the award of damages for breach of contract. (1997)
    Q. What is meant by breach of contract? What are the different remedies available to an aggrieved party as a result of breach of contract. (1998) (2001) (2002)
    Q. What are the remedies for breach of contract. (2003)
    1. Introduction:
    The breach of contract means to violate the contract. When a party breaks the contract be refusing to perform his promise the breach of contract takes place. Under contract act 1872 the injured or aggrieved party has right to take action against the party who did not perform his obligations.
    2. Meaning of remedy:
    Osbornís concise law dictionary
    The means by which the violation of a right is prevented, redressed or compensated.
    3. Remedies for breach of contract:
    Following are remedies for the breach of contract.
    (I) Suit for cancellation of the contract:
    Where one of the parties to a contract commits breach the other party may treat the contract as rescinded and is absolved of all obligation under a contract.
    According to Sec. 75.
    When of the parties to a contract commits breach of contract the other party is released from his obligation under the contract.
    (a) Where court may grant rescission:
    The court may grant rescission if;-
    (i) Where the contract is voidable by the plaintiff.
    (ii) Where the contract is unlawful not apparent on its face and defendant is more be blamed that plaintiff.
    (b) Where count may refuse rescission if:
    The court may refuse to grant rescission if;-
    (i) The plaintiff has expressly or impliedly ratified the contract,
    (ii) Owing to change in circumstances the parties canít be restored to their original position,
    (iii) In the meanwhile the third party has acquired rights in good faith and for value,
    (iv) Only a part of the contract is sought to be rescined and it is severable from the rest of the contract.
    Case law
    P.L.J 1988 Lah. 27
    It was held rescission of avoidable contract may be communicated or revoked in the same manner and subject to the same rules as apply to the communication or revocation of a proposal.
    (II) Suit for damage:
    Suit for damages is the second remedy in case of breach of contract.
    It is monetary compensation awarded to the injured party for the loss occasioned to him.
    (b) Object of damages:
    The object of awarding damages it to put the injured party in the same financial position in which they would have if there were no breach.
    ( c) Kinds of damages:
    Following are the various kinds of damages.
    (i) Ordinary damages:
    Damages which naturally arose in the usual course of things from breach of the contract.
    (ii) Special damages:
    Special damages arise when a party makes a special contract through which he expects a large profits and such profits are likely to be lost through breach of the contract.
    Circumstances when special damages can be claimed:
    (i) The special circumstances must he known to the parties at the time of contract,
    (ii) Subsequent knowledge of the special circumstances will not create such damages,
    (iii) The damages must be such as would naturally result from the breach of contract,
    (iv) The parties must have the knowledge about this loss.
    ( iii) Examplary damages:
    These damages are awarded in order to punish the guilty party for breach of the contract and not to compensate the loss of the aggrieved.
    ( iv) Normal damages:
    When the aggrieved party suffers no loss, the court may award nominal damages in the recognition of his right.
    (III) Suit upon quantum merit:
    It means Ďas much as is meritedí. Claim on quantum merits arises only where one of the parties has not performed its part of the promise but has not been discharge because of the breach of other party.
    When suit upon quantum merit can be filed:-
    The aggrieved party can file suit upon quantum merit in the following cases.
    (i) When an agreement becomes subsequently void.
    (ii) When something is done without any intention to do so gratuitously.
    (iii) When there is a promise to render services but there is no agreement as to remuneration.
    (iv) When the contract is divisible.
    (v) When the completion of the contract has been prevented by the other party,
    (vi) When an indivisible work is performed.
    (IV) Suit damages are not an Ďadequate remedy court may direct the party in breach to carry out its proceeding to the terms of the contract.
    (a) Cases when specific performance granted
    Following are the cases when specific performance is granted:
    (i) Where compensation in money is not an adequate relief.
    (ii) Where it is difficult to calculate the actual damages caused by the on-performance.
    (iii) Where compensation cannot be obtained.
    (b) Cases when specific performance is not granted:
    Following are the cases when specific performance shall not be granted:
    (i) Where contract is of personal nature.
    (ii) Where the money compensation is adequate relief.
    (iii) Where one of the parties is minor,
    (iv) Where court canít supervise it carry out.
    (v) Where a contract is made by trustees in breach of their trust.
    ( IV) Suit for injunction:
    Injunction is an order of a court restraining a person from doing something which he promise not to do. It is a preventive relief and a mode of securing specific performance in negative form.
    Injunction is a discretionary remedy by the court.
    Case law
    Warner bros v. nelson
    (1937) I K. B 209
    A film actress agreed to act exclusively for W for 2 years and for on one else but during this period, she contracted to act for 2 years could and for no one else also. Held she be restrained by injunction from doing so.
    4. Conclusion:
    To conclusion it can be said that, under contract act there are different remedies which are available to aggrieved party on the breach of contract against the guilty party.

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