Remedies for breach of contract Remedy is the means given by law for the enforcement of a right when contract

t is broken, the injured party has following remedies: 1. Rescission: when contract broken by one party, the other may treat contract as rescinded refuse further performance injured party absolved of all his obligations under the contract however liable to restore any benefits he has received under the contract also entitled to compensation for any damages sustained by him. Example: A promises to supply goods to B by a specified date - B agrees to pay the price after receipt of the goods A fails to supply the goods by the specified date B is discharged from liability to pay the price. The Court may grant rescission (i) where contract is voidable at the option of the plaintiff, or (ii) where the contract is unlawful for causes not apparent on its face and defendant is more to blame than the plaintiff. The Court may refuse to grant rescission in following cases : (i) where plaintiff has expressly or impliedly ratified the contract, or (ii) where owing to changed circumstances (not due to any act of defendant), parties cannot be restored to their original positions, or (iii) where third parties have acquired rights in the subject matter of the contract in good faith and for value, or (iv) Where only a part of contract is sought to be rescinded and such part is not severable from the rest of the contract. 2. Damages monetary/pecuniary compensation allowed to injured party by Court for loss or injury suffered by him - injured party entitled to (a) damages which arise in usual course of things for such breach ordinary damages. (b) Damages which the parties knew, at the time of entering into contract, to be likely to result from the breach special damages. (c) Damages for breach of quasi contract same as for any other contract. However, damages not given for any indirect or remote loss or damage. Hadley V Baxendale As mill stopped by breakdown of a shaft A delivered shaft to B, a common carrier, to be taken to manufacturer for repairs A did not inform B that delay would cause loss in profits due to Bs negligence, delivery of shaft delayed beyond reasonable time Held, B not liable for loss of profits during the period of delay as B was not intimated that delay in delivery of the shaft would entail loss of profits. Rules relating to damages Ordinary damages arises naturally and directly from breach in usual course of things.

In contract for sale of goods, measure of damages on breach is the difference between the contract price and the market price on the date of the breach where goods specially made to order and not marketable, the price of the goods is the measure of damages. Example: A contracts to buy rice from B at Rs.950 per quintal no time fixed for delivery later A informs that he will not buy from B market price on that day was Rs.930 per quintal B entitled to receive compensation from A at the rate of Rs.20 per quintal. Example: A contracts to pay a sum of money to B on a specified day A does not pay on specified day as a consequence, B is unable to repay his debts and is totally ruined A is not liable to make good to B anything more than principal sum he contract to pay together with interest up to day of payment. If promisee neglects or refuses to afford the promisor reasonable facilities for performance of his promise, promisor is excused from performance. Special damages : such damages may reasonably be supposed to have been in contemplation of both parties as probable result of the breach however, cannot be claimed as matter of right. Simpson v London & N.W. Rail. Co. S sent specimen of his goods for exhibition at agricultural show after show, he entrusted his goods to an agent of railway company for carriage to another show grounds at New Castle on consignment he wrote must be at New Castle Monday certain due to negligence of railway company, goods arrived late for the show Held, S could claim damages for loss of profit at show. Madras Rail Co. V Govinda Rau - G, a tailor, delivered a sewing machine and some cloth to railway company to be delivered at a place where a festival was to be held expected exceptional profits at festival did not bring it to notice of railway company goods delivered after conclusion of festival Held, G could not recover the loss of profit. Vindictive or exemplary damages vindictive/punitive by nature normally awarded in breach of promise to marry and wrongful dishonour or cheque by banker. Nominal damages where injured party has not suffered any loss due to breach, only nominal damages are awarded only to acknowledge that the plaintiff has proved his case and won. Brace V Calder A firm consisting of four partners employed B for a period of 2 years after six months, two partners retired continuing partners refused to employ B Held, he was only entitled to nominal damages as he had suffered no loss. Damages for loss of reputation normally not recoverable exception, wrongful dishonour of customers cheque by banker in spite of sufficient funds to the credit of the customer general rule is: smaller the amount of the cheque dishonoured, the larger is the amount of damages awarded if customer is not a tradesman, he can recover nominal damages only. Damages for physical inconvenience and discomfort measure of damage not affected by the motive or the manner of breach.

Addis V Gramophone Co. Ltd. A wrongfully dismissed in harsh and humiliating manner by G from employment Held, A could recover wages for the period of notice and the commission which he would have earned during that period but not entitled to anything for his injured feelings or for the loss sustained from the fact that his dismissal made it more difficult for him to obtain employment. Hobbs V London & S.W. Rail Co. H, alongwith his wife and children, took ticket for midnight train for particular place where he lived wrongfully transported to a wrong place had to walk several miles on a drizzling wet night his wife caught cold Held, H entitled to recover 8 to compensate him for inconvenience but nothing for medical expenses of his wife as her catching cold was too remote a consequence. Mitigation of damages: injured party duty bound to take all reasonable steps to mitigate the loss caused by the breach cannot claim damages for loss which reasonably could have been avoided. Difficulty of assessment no bar to recovery of damages Court to estimate the loss and may take into account a contingency. Chaplin V. Hicks - H advertised a beauty competition readers of certain newspapers to select 50 ladies then H was to select 12 out of those 50 selected 12 to be provided theatrical engagements C was one of the 50 selected however, C was not present at the time of final selection due to Hs breach of contract Held, C was entitled to damages although it was difficult to assess them. Cost of decree aggrieved party entitled to the cost of getting the decree, in addition to damages allowed at discretion of the Court. Damages agreed upon in advance in case of breach if contract contains a stipulation that a certain sum to be paid by way of penalty for failure to perform the obligations - aggrieved party entitled to receive a reasonable compensation not exceeding the amount so named. May be liquidated damages or a penalty liquidated damages represent a sum (fixed or to be ascertained) which is fair and genuine pre-estimate of the probable loss caused by breach penalty is disproportionate to the damage and is fixed only with a view to secure performance of the contract. Dunlop Pneumatic Tyre Co. Ltd. Vs. Selfridge & Co. Ltd. S bought tyres from Dunlop Rubber Co. sold them to D, a sub-dealer D agreed not to sell below Dunlop Rubbers list price to pay Dunlop Rubber 5 for every tyre undersold - D undersold two tyres Dunlop Rubber sued for breach Held, the sum fixed was a genuine pre-estimate of damage and not a breach. Payment of interest stipulation regarding payment of interest in case of default not in the nature of penalty allowed if reasonable higher rate of interest may be allowed from the date of default if not penal in nature higher rate never allowed from the date of the contract compound interest at the same rate as simple interest may be allowed as not penal in nature where lower rate is charged if certain conditions satisfied, failure to fulfil the conditions may entail payment of higher (i.e. normal) rate of interest. 3. Quantum Meruit means as much as earned or as much as merited arises when contract partly performed by one party and then becomes discharged due to breach by other party party who has performed the work can claim remuneration for the work done it is claim on quasicontractual obligation

Arises in following cases (i) when agreement discovered to be void person who has received advantage under the contract is bound to restore it or to make compensation for it. Craven-Ellis V. Cannon Ltd. CE employed as managing director in a company after three months, found that directors were not qualified to appoint him Held, CE could recover remuneration for the services rendered by him on quantum meruit. (ii) When something done without intention to do so gratuitously. (iii) When there is express or implied contract to render service, but no agreement as to remuneration Upton Rural District Council v Powell - Ps farm did not come under the free service zone of the fire department - fire at Ps farm P called up U pton Fire Brigade which arrived and put out the fire Held, there was implied agreement between P and fire brigade for the service of the brigade - P was liable to pay reasonable remuneration for the service rendered. (iv) When completion of contract prevented by the act of the other party Planche V. Colburn - C engaged P to write book on ancient armoury to be published in instalments in periodical called The Juvenile Library for fee of 100 after few issues, publication of periodical stopped Held, P could recover on quantum meruit for the work done by him. De Bernady V Harding P wrongfully revoked his agent As authority before A could complete his duties Held, A could recover quantum meruit for the work done by him and the expenses incurred by him in course of his duties. (v) When contract is divisible where party not in default has enjoyed the benefit of part performance, the party in default can sue on quantum meruit (vi) When indivisible contract performed completely but badly Hoenig V. Issacs A agreed to decorate Bs flat for a lump sum of quantum 750 certain requirements laid down A completed the work but B complained of faulty workmanship it cost B 204 to remedy that defect Held, A could recover from B 750 less 204. 4. Specific Performance in cases where damages are not adequate remedy, Court may direct for specific performance also enforced where no standard for ascertaining the actual damage caused. 5. Injunction where a party is in breach of a negative term of contract, Court may restrain him from doing what he promised not to do. Lumley Vs. Wagner - W agreed to sing at Ls theatre agreed not to sing anywhere else during that period later, W made contract with Z to sing at another theatre and refused to perform the contract with L Held, W could be restrained by injunction from singing by injunction from singing for Z.