REMEDIES FOR BREACH OF CONTRACT

Broadly speaking, remedies available in case of

breach of contract are of two kinds:
Common Law remedy viz., damages;
Equitable remedy viz.,
Specific Performance of contract
Injunction
Rectification
Cacellation
Quantum meruit
Restoration, etc.



Common Law Remedies
The Rule of Common Law is that
Where a party sustains loss by reason of breach of
contract, he is, so far as money can do it, to be placed
in the same situation with respect to damages, as if
the contract had been performed.
- Sunley vs. Cunard White Star Ltd (1940)
A agrees to supply goods to B @ Rs.100/- per article.
B accepts the offer. If A does not supply, B may get those
articles from market by spending @Rs.120/- each i.e., by
spending an extra amount of Rs. 20/-per article.
If court can make A give that extra Rs. 20/- per article,
B will be placed in a position, as if the contract has been
performed.

Common Law Remedies - 2
Another Important point is that

The measure of damages is the value of performance
of the contract to the Complainant;

And, not what it costs to the defendant to perform it.

The remedy of damages, therefore, only tries to
evaluate in terms of money the loss which a party
sustains as a result of breach of contract.

Money is not always an adequate remedy for breach
of contract, but

Where specific performance is not available, the
alternative before the court is to award damages.

KINDS OF DAMAGES. [Sec 73 & 74]
Damages are of four kinds: (Generally speaking)
1. General /
Ordinary / or
Substantial
2. Special
3. Vindictive /
Punitive / or
Exemplary
4. Nominal
NOTE: Damage means - Loss
Damages means - compensation


ORDINARY DAMAGES.
Ordinary Damages are usually awarded
- only for consequences naturally following out
of the breach i.e. the proximate consequences.

A contracted to supply funds in installments to B
for producing a movie but committed default. B
had to borrow money on interest. When it came
before the Court, it said

that the proper measure of damages was only the
loss sustained by B by reason of damage which
naturally followed as a consequence of the
breach to pay installments in time.

B was not entitled to recover in respect of every
misfortune indirectly occasioned to B.
[Jayaraghavan vs. The Leo Films (1948) 1 MLJ 209]

Special Damages are claimed as Loss of
Profit etc.

Where the purchaser P on the strength of a
contract for sale of goods with S, enters in a
contract at a higher prices for their resale to B.

In this case, the loss arises
- not in the usual course of natural consequences;
- But, on account of unusual or extraordinary of
the case.
[Ref: Hadley vs. Boxendale (1854)]



SPECIAL DAMAGES
Vindictive Damages.
This type of Damages are awarded with a view to
- Punish the defendant.
- Not solely with the idea of awarding compensation
to the complainant.

As a rule, Vindictive damages are not granted in cases of
breach of contracts; But, will be awarded in cases of tort.

Exceptions to this Rule are
Breach of contract to marry
Breach of contract by a Banker possessing the
funds of the customer to honour his cheque.
In such situations,
- the smaller the cheque
- the greater the insult.



Nominal Damages.
Nominal Damages are awarded
Where there is only a technical violation of the legal
right
But, No substantial Loss is caused thereby.

In such situations, the damages granted are
called Nominal, because they may be:
One Rupee, or
One Paisa which may have a nominal
existence; but no existence in point of
quantity .
Example of Nominal Damages.

T a trader in cars contracted the dealer D to
purchase cars at the then prevailing rates.
T committed a default in lifting the cars.
But, the demand for that brand of cars far
exceed the supply.
The market situation was such that D, the dealer
could sell the cars agreed to be purchased by T
without loss of profit.
Held by the court: The dealer D was entitled
only to Nominal Damages. [Chapter vs. Sullivan (1957)]