Remedies for Breach of Contract.

Meaning of breach of contract: A contract gives rise to rights and obligations. When the obligations under a contract have been performed, the contract terminates. A contract is discharged only by performance of obligations. On the other hand, if a party to a contract doesnt perform his obligation, or expressly refuses to perform the contract, it amounts to what is called breach of contract I

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In the case of breach of contract, the party who doesnt or refuses to, perform his obligations is called the defaulting party where as the other party is the aggrieved party. Remedies available to Aggrieved party: Exoneration: When one party to a contract refuses or fails to perform, i.e. commits a breach of contract, the aggrieved party can assume the contract to terminate, rescind the contract and is exempted from further performance. For e.g. M makes a contract to sell certain goods to S for Rs. 2000 and S promises to make the payment on delivery. If M refuses to deliver the goods at the promised time, S can assume the contract to terminate. In this case he is freed from his commitment to pay Rs. 2000.

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Claim for Damages: Damages are a monetary compensation allowed to the aggrieved party by law for the loss of injury suffered by him for the breach of a contract. Damages are a compensation for the loss suffered by, or the damage done, to the aggrieved party by the breach. ( A promises to deliver 100 cycle tyres at Rs. 50 each to B on 1 May, 2010, but doesnt perform his promise on that date. In such circumstances, if the price of a cycle tyre on 1 May is Rs. 55 pe tyre, then B is entitled to claim damages at Rs. 5 per tyre from A and can sue fur such damage.

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Claim for Quantum merit : Quantum merit literally means as much as earned and implies payment to a party of as much money as the party would have earned, had there been no breach of contract. When one party, at the request of another does something or supplies some goods to the other party, and if the compensation for such goods or services has not been defined at the time of the contract, then the law decides what should be an adequate compensation for such goods or service, which is what is called quantum merit. How much or what would be such compensation depends upon the circumstances of the case.

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For e.g. A promises to construct a house for B for Rs. 50,000. After A has started construction, but before its completion, B abrogates the contract and stops A from work. In such a situation A can sue for adequate compensation for the work that he has already done and can sue for damages. For the law of quantum merit to be operative, it is necessary for the contract to be divisible in the sense that it is possible to estimate the value of the part that has been executed. It is also essential that the contract is not abrogated by the party making the demand for compensation.

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Claim for specific performance: When, in the case of breach of contract, damages are not deemed to be an adequate remedy, the aggreived party can sue the party in breach to carry out his promise; in other words, the party in breach can be lawfully bound to perform as per the terms of the original contract. This is a direction by the court for specific performance of the contract at the suit of the aggreived party. Specific performance is at the discretion of the court when the court feels that damages are not an adequate remedy because there is not other remedy for the aggreived party than the performance of the contract.

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Claim for injunction: An injunction is a mean of claiming specific performance where such performance involves restraining a party from doing what he has promised not to do. It is a negative order by the court that restrains a party from doing something. ( N, a film actress agreed to act exclusively for Mr. M for one year. During the year she contracted to act for X. It was held that she could be restrained by an injunction from acting for X)