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Remedies for breach of contract

Unread postPosted: Thu Jan 24, 2013 2:44 pm
by Admin
Remedies for breach of contract
The principal remedies for breach of contract are:
(a) damages;
(b) specific performance of the contract; and
(c) injunction.

When a contract 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, being loss or damages 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 and indirect loss of damage sustained by reason of the breach. The same principle applies for determining damages for breach of an obligation arising from quasi-contract. In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. This is referred to, as the duty to mitigate.

Illustration
A stipulation for increased interest from the date of default may be regarded as a stipulation by "way of penalty", if the amount is excessive. The court is empowered to reduce it to an amount reasonable in the circumstances.

Specific performance and injunctions
In certain special cases dealt with in the Specific Relief Act, 1877, the court may direct against the party in default "specific performance" of the contract, that is to say, the party may be directed to perform the very obligation which he has undertaken, by the contract. This relief is awarded only in exceptional cases.

That Act also deals with permanent injunctions. Temporary injunctions are governed by the provisions of order of the Code of Civil Procedure, 1908.