Remedies for Breach of

Contract

Where there is a right, there is a remedy

When a contract is broke, the injured party

has one or more of the following remedies:
1. Recession of contract
2. Suit for Damages
3. Suit upon Quantum meruit
4. Suit for specific performance of contract
5. Suit for Injunction

Recession of the
contract
When a contract is broken by one party, the
other party may sue to treat the contract as
rescinded and refuse further performance. In
such a case, he is absolved of all his
obligations under the contract.
A promises B to supply 10 bags of cement on
a certain day. B agrees to pay the price after
the receipt of goods. A does not supply goods.
B is discharged from liability to pay the price.

Suit for Damages

Damages are monetary compensation allowed to
the injured party by the court for the loss or injury
suffered by him by the breach of the contract.
1.
2.
3.
4.
5.

Ordinary Damages
Special Damages
Vindictive or Exemplary damages
Nominal damages
Damages for loss of reputation

. Liquidated damages and Penalty

 Ordinary Damages: 50 Quintals of wheat

at Rs 475 per quintal. Price rises to 500 and
party refuses to sell. Damages @ Rs 25 per
quintal.
Special Damages: A-B-C, to erect a house
by 1st of January so as to let out to C. Loss of
Rent
Vindictive/Exemplary Damages:
compensation for loss suffered and not as
punishment. Exceptions- dishonor of a
cheque.
Damages for loss of reputation:
Generally not recoverable, exceptionwrongful Dishonor of cheque, smaller the
amount, larger the compensation.

Liquidated damages and

Penalty
Sometimes parties to contract stipulate at
the time of its formation that on breach of
it, a certain specified sum will be payable.

A agrees to pay B Rs 1000 on Jan 1 and if

he fails to make payment at the stipulated
time he agrees to pay Rs 1500 as
liquidated damages. The extra 500 is
penalty.

Suit for Quantum Meruit

As much as earned
Some work under a contract, and other party
repudiates or some event makes further
performance impossible, then party performing
work can claim remuneration for the work already
done.
CE was employed as managing director in a
company. After 3 months, it was found that the
directors were not qualified to appoint him. CE could
recover remuneration for services already rendered.

Suit for Specific Performance

In certain cases, where damages are
not an adequate remedy, court may
order Specific performance of contract :
When compensation in money is not
adequate relief,
No standard for ascertaining actual
damage caused by non performance of
act agreed,
When it is probable that compensation
in money cannot be got for nonperformance of act agreed to be done.

Suit for Injunction

Breach of negative term of contract
(doing something which he promised not to
do), court may restrain him from doing that.
Eg. W agreed to sing at L,s theatre and
during a certain duration to sing nowhere
else. Afterwards W made contract with Z to
sing at another theatre and refused to
perform contract with L. Held, W could be
restrained by injunction.

Indemnity and
Guarantee
A contract by which one party promises to
save the other from loss caused to him by
the conduct of the promisor himself, or by
the conduct of any other person, is called
Contract of Indemnity.
Sec 124
Person who promises to make good the
loss- Indemnifier
Person whose loss is to be made goodIndemnified or Indemnity holder

Contract of Guarantee
A contract of guarantee is a contract to perform the
promise, or discharge the liability, of a third person in
case of his default
The person who gives the guarantee is called Surety,
Person in respect of whose default guarantee is given
is called principal debtor
Person to whom the guarantee is given is called
creditor

Distinction between Contract

of Indemnity and contract of
Guarantee
Contract of Indemnity

Contract of Guarantee

Two parties:
Indemnifier and
Indemnified

Three parties- surety,

principal debtor and
creditor

Liability of indemnifier
is primary

Liability of surety is
secondary, primary being
of principal debtor

Only one contract

3, PD and C, C and S and S

and PD.

Request of indemnified
is a must

Surety to give guarantee

only at the request of PD