1. Remedies for Breach of Contract
INDIAN CONTRACT ACT, 1872
Remedies for Breach of Contract

2. Remedies for Breach of Contract
Breach of contract is the failure to perform what a party is under a duty to perform.
When this happens, the non-breaching party can choose one or more remedies.
Unless damages would be inadequate a court will award money damages
When one of the parties to the contract makes a breach of the contract the following remedies are available to the other party.
Damages
Quantum Meruit
Specific performance and injunction

3. Damages
1. Damages : Remedy by way of damages is the most common remedy available to the injured party. This entitles the injured party to recover compensation for the loss suffered by it due to the breach of contract, from the party who caused the breach. Section 73 to section 75 incorporate provisions in this regard;
A breach of contract entitles the non-breaching party to sue for money (damages).
In the context of contract law, damages compensate the non-breaching party for the loss of the bargain.
Damages place the innocent party in the same position they would have occupied had the contract been fully performed.

4. Types of Damages There are basically four broad categories of damages:
Compensatory (to cover direct losses and costs).
Consequential (to cover indirect and foreseeable losses).
Punitive/ Exemplary (to punish and deter wrongdoing).
Nominal (to recognize wrongdoing when no monetary loss is shown).

5. Damages 1. Compensatory Damages
These damages compensate the injured party for damages arising directly from the loss caused by the breach of contract.
The difference between the promised performance and the actual performance.
They replace what was lost because of the breach of contract.

6. Damages
2. Consequential Damages: Damages caused by special circumstances beyond the contract itself. They flow from the consequences, or results, of a breach.
The breaching party must know (or have reason to know) that special circumstances will cause the additional loss.
Hadley v. Baxendale: The following statement of Alderson is considered to be the basis of the law to determine whether the damage is the proximate or remote consequence or breach of contract : “Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may be fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonable be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it”.

7. Damages 3. Punitive or exemplary Damages
Punitive, or exemplary, damages are generally not awarded in an action for breach of contract.
Punitive damages are designed to punish.
Contract damages are to compensate.
Some intentional torts, such as fraud, are a bases for recession and a tort allowing punitive damages for the commission of the tort.

8. Damages
4. Nominal Damages: When no actual damages result from a breach of contract and only a technical injury is involved.
Jackson contracts to buy potatoes from Stanley for some amount. Stanley breaches the contract and does not deliver the potatoes. In the meantime, the price of potatoes has fallen. Jackson is able to buy them in the open market at half the price he contracted for with Stanley. He is clearly better off because of Stanley's breach. Thus, in a suit for breach of contract, Jackson may be awarded only nominal damages for the technical injury he sustained, because no monetary loss was involved.

9. Remoteness and Measure of Damage
In an action for damages for the breach of contract there arise two kinds of problems :
Firstly, it has to be determined whether the loss suffered by the plaintiff is the proximate consequence of the breach of contract by the defendant. The person making the breach of contract is liable only for the proximate consequences of the breach of contract. He is not liable for damage which is remotely connected with the breach of contract. In other words, the first problem is the problem of “Remoteness of Damage.”
It is found that the particular damage is the proximate result of the breach of contract rather than too remote, the next question arises is : How much compensation is to be paid for the same? This involves determining the quantum of compensation. This, in other words, is the problem of “Measure of Damages.”

10. Measure of Damages
After it has been established that a certain consequence of the breach of contract is proximate and not remote and the plaintiff deserves to be compensated for the same, the next question which arises is : What is the measure of damages for the same, or in other words the problem is of the assessment of compensation for the breach of contract.
Damages are compensatory in nature. The object of awarding damages to the aggrieved party is to put in the same position in which he would have been if the contract had been performed.

11. Measure of Damages
In a contract of sale of goods the measure of damages is the difference between the contract price and the market price on the date of the breach of contract.
For instance, A agrees to supply B a radio set on January for Rs. 1,000. If A fails to supply the radio set and the market price of the radio set on that date is Rs. 1,200, B will be entitled to recover from A Rs as damages. The reason is that the loss suffered by the buyer is Rs. 200 because due to the rise in the market price of the radio set he will have to pay that much extra if he purchases the radio set from the market. Similarly, if the buyer (B) refuses to take the radio set on the due Date, the seller will also be entitled to recover the difference between the contract price and the market price on 1st January. For instance the market price of the radio set on that date is Rs. 800, A’s loss is Rs.200 in respect of the transaction, because from another customer A can get only Rs. 800 whereas B had promised to pay Rs. 1,000 for the same. A can recover Rs. 200 from B..

12. Measure of Damages
The rule in this regard was stated in Borrow Vs. Arnaud (1844) in the following words.
“ Where a contract to deliver goods at a certain price is broken the proper measure of damages in general is the difference between the contract price and the market price of such goods at the time when the contract is broken, because the purchaser having the money in his hands, may go into the market and buy. So, if a contract to accept and pay for the goods is broken, the same rule may be properly applied, for the seller may take his goods into the market and obtain the current price for them.”

13. Remedies for Breach of Contract
2. Quantum meruit : When the injured party has performed a part of his obligation under the contract before the breach of contract has occurred, he is entitled to recover the value of what he has done, under this remedy. Ordinarily if a person having agreed to do some work or render some service has done only a part of what he was required to do, he cannot claim anything for what he has done. When a person agrees to complete some work for a lump sum non-completion of the work does not entitle him to any remuneration even for the part of the work done. But the law recognises an important exception to this rule by way of an action for ‘Quantum Meruit’ Under this section if A and B have entered into a contract, and A, who has already performed a part of the contract, is then prevented by B from performing the rest of his obligation under the contract, A can recover from B reasonable remuneration for what ever he has already done.

14. Quantum Meruit
The essentials of an action of quantum meruit are as follows :
One of the parties makes a breach of contract, or prevents the performance a part of it by the other side.
The party injured by the breach of the contract, who has already performed a part of it, elects to be discharged from further performance of the contract and brings an action for whatever he has already done.
For instance, if A agrees to deliver B 500 bags of wheat and when A has already delivered 100 bags B refuses to accept any further supply, A can recover from B the value of wheat which he has already delivered.

15. Quantum Meruit
‘A’ hires ‘B’ for advertising and selling the tickets of his concert. ‘B’ started advertising for the same, but before selling any ticket ‘A’ due to some misunderstanding terminates the contract with ‘B’. Here ‘B’ is entitled to recover the charges occurred for advertising the event.

16. Specific Performance and Injunction
3. Specific Performance and Injunction : Sometimes a party to the contract instead of recovering damages for the breach may have recourse to the alternative remedy of specific performance of the contract, or an injunction restraining the other party from making a breach of the contract. Provisions regarding these remedies have been contained in the Specific Relief Act, 1963.

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