Remedies of Breach of contract
Remedies of Breach of contract: The Indian Contract Act sets forth all of the requirements for contract execution. It also provides provisions in the event of either party’s violation of contract. Let’s take a closer look at the potential contract breach remedies.
A breach of contract occurs when one of the parties breaks a commitment or agreement. A breach of contract occurs when one of the parties fails to maintain their end of the agreement or fails to fulfil their obligations according to the contract’s terms. The offended party has a few options for redress in the event of a contract violation. Let’s take a closer look.
Remedies of Breach of contract
1) Contract Recession
When one of the contract parties fails to meet his responsibilities, the other party has the right to terminate the contract and refuse to execute his obligations.
The party who rescinds the contract shall repay whatever advantages he received under the contract, according to section 65 of the Indian Contract Act. Section 75 further specifies that the party that terminates the contract is entitled to damages and/or compensation as a result of the termination.
2) File a Damages Claim
Section 73 expressly specifies that the party who has suffered as a result of the other party’s breach of contract may seek compensation for losses or damages incurred in the ordinary course of business.
If the loss is unusual in nature, i.e. not in the regular course of business, such damages will not be paid. According to the Act, there are two categories of damages:
Liquidated Damages: In certain cases, the contract parties will agree on the amount to be paid in the event of a breach. Liquidated damages are the term for this.
Unliquidated Damages: The amount owed as a result of a contract violation is determined by the courts or other competent authorities.
3) Make a claim for a certain performance.
This indicates that the party in violation will be required to perform his obligations in accordance with the contract. In certain situations, the courts may order the party to follow through on the agreement.
As a result, if one of the parties fails to fulfil their obligations under the contract, the court may compel them to do so. This is a special performance decree that is given instead of damages.
For instance, A chose to purchase a plot of land from B. After that, B refuses to sell. The courts may require B to fulfil his contractual obligations and sell the property to A.
4) Suspension
An injunction is similar to a decree for particular performance, except it is issued in the case of a negative contract. An injunction is a court order that prevents someone from doing something.
As a result, a court may issue an injunction to prevent a contracting party from carrying out a contract. A prohibitory injunction prevents the commission of an act, whereas an obligatory injunction prevents the continuation of an illegal conduct.
5) Meruit Quantum
The phrase “as much as is earned” is literally translated as “quantum meruit.” When one party to a contract is hindered from completing his contract performance by the other party, he may sue for quantum meruit.
As a result, he must be compensated fairly for the portion of the contract that he has already completed. This might be the monetary worth of the task he has already completed or the payment for the services he has delivered.