Remedies for Breach of Contract
When a Contract is breached, there are specific remedies to it. Broadly speaking, there are six remedies available.
Rescission of the Contract
When one party to the contract breaches the contract, the other party need not perform his part of the obligations. The aggrieved party may rescind the contract. In such cases, the injured / aggrieved party can either rescind the contract of file a suit for damages. In general, rescission of the contract is accompanied by a suit for damages.
Suit for damages
The aggrieved party of the contract is entitled for monetary compensation when the contract is breached. The objective of Suit for damages is to put the aggrieved / injured party in a position in which he would have been had there been performance and not breach. The aggrieved / injured party must be able to prove the actual loss or no damages will be awarded. Damages can be of four kinds.
- Ordinary or General Damages
- Special Damages
- Exemplary or Punitive Damages
- Nominal Damages
Suit for Quantum Merit
The term "Quantum Merit" is derived from Latin which means "what one has earned". The injured party can file a suit upon quantum merit and may claim payment in proportion to work done or goods supplied. Sections 65 to 70 deal with the provisions relating to suit for Quantum Merit.
Suit for Specific Performance
The suit for Specific Performance is regulated by the Specific Relief Act, 1963. Specific Performance means the actual carrying out of the contract as agreed. The Court may grant for specific performance where it is just and equitable to do. Specific Performance may be granted under the following grounds.
- Lack of standard for ascertaining the damages
- Where compensation is not adequate relief
- Substantial work done by the plaintiff.
The Court cannot grant the remedy of specific performance in the following situations.
- Where monetary compensation is an adequate relief
- Where the Court cannot supervise the actual execution of the work
- Where the Contract is for personal services
- Where the Contract is not enforceable by either party against the other.
Suit for Injunctions
Injunction is an order of the Court restraining a person from doing a particular act. Where the defendant is doing something which he is promised not to do, then the injured party will get a right to file a suit for injunction.
- Section 94 of Code of Civil Procedure, 1908: Supplemental proceedings
- Section 95 of Code of Civil Procedure, 1908: Compensation for obtaining arrest, attachment or injunction on insufficient grounds
- Section 142 of Code of Criminal Procedure, 1973: Injunction pending inquiry
Remedies according to various country-specific laws
- India: As per the Indian Contract Act, 1872, when a contract is breached, the aggrieved / injured party is entitled to one or more of the following remedies.
Related Case Laws
- Lumley vs. Wanger (1852)
- Metropolitan Electric Supply Company vs. Ginder (1901)
- Section 73 of Indian Contract Act, 1872: Compensation for loss or damage caused by breach of contract