Breach of Contract - Remedies for Breach of Contract

Q. What remedies are available to seller and buyer in case of breach of contract? Discuss. [10 marks - 2022]

Breach of Contract

When any of the parties to a valid contract fails to perform it's obligations as per the agreed upon terms and conditions, this is called breach of contract. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The following three points are essential for a breach of contract:

• A valid contract,
• Performance by one party, and
• Damages suffered by the performing party.

Remedies for Breach of Contract

1. Cancellation of Contract

When one of the parties to a contract does not fulfil his obligations, then the other party can cancel the contract. As per section 65 of the Indian Contract Act, the cancelling party must restore any benefits received. Section 75 entitles the cancelling party to receive damages.

2. Sue for Damages

Section 73 states that the party who has suffered for the breach of contract, can claim compensation for loss or damages caused to them in the normal course of business.

3. Sue for Specific Performance

The breaching party may be sued for performing the duties as per the contract. In certain cases, the courts may insist that the party carry out the agreement.

For example, A agrees to sell a piece of land to B. But later on he refuses to sell. The courts can order A to perform his duties under the contract and sell the land to B.

4. Injunction

An injunction is a court order restraining a person from doing a particular act.

5. Quantum Meruit

Quantum meruit in Latin mean “as much is earned”. At times when one party of the contract is prevented from finishing his performance of the contract by the other party, he can claim quantum meruit.