DEFINE BREACH OF CONTRCT. WHAT ARE THE REMEDIES AVAILABLE TO AN AGRIEVD PARTY.

INTRODUCTION:
                          Breach of contract occurs where a party to a contract fails to perform precisely and exactly his obligation under the contract without any legitimate legal excuse.This may include not completing a job, not paying in full or on time,failure to deliver the goods etc.
          With respect to time, breach of contract may be anticipatory or actual.
Actual beach occurs where one party refuses to perform his obligation on due date or performs incompletely.
  Anticipatory breach occurs where one party announces,in advance of the due date,that he intends not to perform his obligation.

Effect of breach:
                           A breach of contract,no matter what form it may take, always entitles the innocent party to maintain an action for damages.
 
The innocent party has two options:
1. He may elect to treat the contract as still valid, complete his obligation and sue for payment from other side.
2. He may treat the contract as discharged and bring a action for damages for breach o contract immediately.

                 INTRODUCTION TO REMEDIES FOR BREACH OF CONTRACT
          Damages is the basic remedy available for breach of contract. The object of damages is to put the injured party into the same financial position he would have been in had had the contract been properly performed.Sometimes damages is not an adequate remedy and this is where the equitable remedies may be awarded.

The following are the remedies available to an aggrieved party on breach of contract.

1. Rescission of the contract.
2. Suit for damages.
3. Suit upon quantum meruit.
4. Suit for specific performance.
5. Suit for injunction.

1. Rescission.

When one of the parties to a contract commits breach, the other party may treat the contract as rescinded and is absolved of all obligations under the contract.

When a party treats the contract as rescinded, he makes himself liable to restore any benefit that he has received under the contract from the other party.

If a party rightfully rescinds the contract, he is entitled for compensation by the other party for any damage which he was sustained through the non-fulfillment of the contract.

Example:

A contract to supply cotton to B on 12 dec. B agrees to pay the price on receipt of cotton. A doe not supply on due date. B is discharged from liability to pay. B can rescind and claim damages.

The court may grant rescission:

1. Where the contract is voidable by the plaintiff.
2. Where the contract is unlawful not apparent on its face and defendant is more to be blamed than the plaintiff.

The court may refuse to grant rescission:

1. The plaintiff expressly or impliedly ratified the contract.
2. owning to change in circumstances, the parties can not be restored to their original position
3. In the meanwhile, the third parties have acquired rights in good faith for value.

2. Suit for damages:

It is a monetary compensation awarded to the injured party for loss faced by him. The object of awarding damages is to put the injured partying the same financial position in which they would have if there were no breach.

Kinds of damages:

Ordinary Damages.

Damages which naturally arose in the usual course of things from such breach. In a contract of sale of goods, the damages payable are the difference between the contract price and the market price at the date of breach (73)

Special Damages.

Such damages must be in the contemplation of parties at the time when the contract is made if there are some special circumstances which would result in special loss in case of breach of contract. Such special circumstances must be brought to the knowledge of the other party. If there is breach of contract, special damages can be claimed.

Nominal Damages.

Nominal means very small in amount. When the injured party has not in fact suffered any loss due to breach of contract, the damages recoverable from the guilty party are called nominal damages.

Liquidated Damages.

When parties to the contract fix the amount of damages for the breach of contract at the time of formation of the contract, such damages are called liquidated damages. The court will not allow damages more than agreed amount. If the actual loss is more than the agreed amount, damages will be payable to the agreed amount.

Such damages do not form a part of law of contract. These are awarded to punish the guilty party for the breach of contract.

3. Quantum Meruit:

It means ‘as much as is merited. In simple words, it is reasonable value of work done. Where a person has done some work under when a contract and other party cancel the contract or contract becomes void, such party can claim remuneration for the work already done. The right to claim for quantum meruit arises when the original contract is discharged.

Claim on quantum meruit arises from the following:

1. When the contract is discovered to be void.
2. Where something has been done
3. When one party refuses to perform the contract.
4. Where the contract is divisible.

4. Specific Performance:

Specific performance means to do the job as agreed upon. When damages are not adequate remedy court may direct the guilty party to carry out his promise according to the terms of the contract.

Specific performance is granted in the following cases:

1. When compensation in money is not an adequate relief.
2. When there is no standard for calculating the actual damage caused by the non-performance.
3. When the compensation can not be obtained.

Specific performance shall not be granted in the following cases:

1. Where the contract is of personal nature.

2. Where the contract is uncertain.

3. Where court can not supervise its carrying out.

4. Where damages are adequate remedy.

5. Injunction:

It is an order of court restraining a person from doing some act. It is a mode of securing specific performance in negative terms. The court by issuing injunction restrains a person from doing what he has promised not to do. It is a preventive measure that is suitable in anticipatory breach.

Example: (Warner bros. vs nelson)

A film actress agreed to act exclusively for WB for two years and not for anyone else. But during this period, she contracted to act for z also. Held, she could be restrained by injunction from doing so. end