ASSIGNMENT

Business Law

Ali Raza Ladha

20141-17065

401 | Business Law

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Describe the cases when a contract is discharged on the ground of

supervening impossibility.
A contract is discharged by supervening impossibility in the following cases:
1) Destruction of Subject Matter: The contract is discharged if the subject
matter of the contract is destroyed after the formation of the contract without
any fault of either party.
Example X agreed to sell his crop of wheat. The entire crop was destroyed by
fire through no fault of the party. The contract was discharged.
Example A music hall was rented out for a series of concerts on certain days.
The hall caught fire before the date of first concert. It was held, the contract
has become void on ground of supervening impossibility.
2) Death or personal incapacity: The contract is discharged on the death or
incapacity or illness of a person if the performance of a contract depends on
his personal skill or ability.
Example X agreed to sing on a specified day. X fell seriously ill and could not
perform on the day. The contract was discharged.
3) Declaration of War: The pending contracts at the time of declaration of war
are either suspended or declared as void.
Example X contracts to take in cargo for Y at a foreign port. Xs government
afterwards declares war against the country in which the port is situated. The
contract becomes void when the war is declared.
4) Change of Law: The contract is discharged if the performance of the contract
becomes impossible or unlawful due to change in law after the formation of
the contract.
Example X agreed to sell his land to Y. After the formation of the contract, the
Government issued a notification and acquired.

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Describe the remedies for breach of contract.

When a party to the contract makes a breach of contract, there are two possible
alternatives available to the other party. Firstly to bring an action for the breach of
contract, and secondly he may bring an action for specific performance of the
contract.
COMPENSATION IN CASE OF BREACH
1. Compensation for loss or damage caused by breach of contract.
For the breach of contract damages is the most appropriate remedy. When a contact
has been broken, the party who suffers by such breach is entitled to receive, from
the party who has broken the contract, compensation for any loss or damage
caused to him thereby, which naturally arose in the usual course of things from such
breach, or which the parties knew when they made the contract, to be likely to
result from the breach of it.
Such compensation is not to be given for any remote or indirect loss or damage
sustained by reason of the breach.
2. Compensation for breach of contact where penalty stipulated for.
When a contract has been broken and a sum has been named in the contract as the
amount to be paid in case of such breach, or if the contract contains any other
stipulation by way of penalty, the party complaining of the breach is entitled,
whether actual damage or loss is proved to have been caused thereby, to receive
from the party who as broken the contract reasonable compensation not exceeding
the amount so named or, the penalty stipulated for.
3. Party rightfully rescinding contract entitled to compensation.
A person who rightfully rescinds a contract is entitled to compensation for any
damage, which he has sustained through non-fulfillment of the contract.

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CASE STUDY
A. Contract is void but X, the promisor, must compensate the buyer for any loss which
Promise sustains through the non performance of the promise.
B. Contract has become void on the ground of supervening impossibility.
C. Contract is void on the ground of mutual mistake.
D. Contract is not discharged because of commercial impossibility.
E. Contract is not discharged because of default of third party.
F. Contract is not discharged because of default of third party.
G. Contract has become void on the ground of supervening impossibility.

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