REMEDIES FOR BREACH OF CONTRACTBroadly 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 circumstances 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. [Ref: Chapter vs. Sullivan (1957)]