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

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.

Damages are of four kinds:

[Sec 73 & 74]

(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
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)]

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)]