Remedies to Breach of Contract

Remedies to Breach of Contract are provided in the Contract Act, and the provisions relating to remedies in breach of contract are given under sections 73 to 75 of the Indian Contract Act, 1872. The Indian Contract Act covers all the provisions relating to the performance of a contract but the Act also covers provisions relating to remedies for the breach of contract.

Here, the parties to the contract are legally expected to perform their obligations promised, when any party broke the promise or agreement then we call it the contract breached.

Let's discuss what are the remedies for breach of contract?

Types of Remedies for Breach of Contract

1. Recession of Contract
2. Suit for Damages
3. Suit for Specific Performance
4. Injunction
5. Quantum Meruit

These are the 5 remedies in breach of contract. Let's discuss one by one;

1. Recession of Contract

The recession of contract means when one of the contracting parties failed to perform his/her contractual obligations then the other party can rescind/refuse to perform the contractual obligations in the contract.

According to section 64 of the Contract Act, the party who rescind the contract and gained profit from the agreement, he must restore such benefit.

And, as per section 74, the party who received such benefit from the agreement and rescind the contract must compensate the other party if any loss is caused to the other party due to rescission of the contract.

2. Suir for Damages

Section 73 of the Contract Act clearly stated that if one contracting party suffered any damages or loss due to non-performance of the other party to the contract, then the aggrieved party can claim the compensation for loss or damages he/she caused.

Here the term damages mean if any party suffered loss due to breach of contract by the other party, the loss to the party is referred to as damages.

Therefore, if any party failed to perform the promise and breached the contract then the other party has the right to claim compensation by filing suit against the other party for breach of contract.

3. Suit for Specific Performance

When the contracting party failed to perform his promise then the other party can file a suit for the specific performance of the contract. It is the duty of the contracting parties to perform their obligations agreed upon during the formation of the contract.

Therefore, if one party failed to perform his obligations then the other party can sue him in court, and the court may pass the order to perform the contractual obligations to the other party. 

In this situation, the court may observe that due to non-performance of contract the other party suffers huge loss or damage and that can not be compensated, hence the court may order the other party to perform the contractual obligations remaining on his part.

4. Injunction

The term injunction means restraining the person from performing a certain act this is called an injunction. The injunction is always passed by the courts.

Generally, the injunction is like a decree for specific performance of the contract but for the negative contract. So, the injunction is the order passed by the court to restrain the person from performing certain acts.

Therefore, the court may grant an order of injunction to stop a contracting party from performing something that he promised not to do. In a prohibitory injunction, the court stops the commission of an act and in a mandatory injunction, it will stop the continuance of an act that is unlawful.

5. Quantum Meruit

The term quantum meruit means 'as much as 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.

So he must be paid a reasonable remuneration for the part of the contract he has already performed. This could be the remuneration of the services he has provided or the value of the work he has already done.

Conclusion

Remedies to the breach of contract has been provided under section 73 to 75 of the Indian Contract Act, 1872. As we discussed above, these are the breach of contract remedies available for the aggrieved party when the other party breached the contract.

Referred Books:

• Law of Contract - Bare Act 2021 Edition Professional
• The Indian Contract Act 1872 Bare Act 2021 Edition
• Law of Contract & Specific Relief Dr Avtar Singh Latest Edition-2020
• Pollock & Mulla - The Indian Contract Act, 1872
• CONTRACT Paper  I - By R.K. Bangia [Edtion 2019 - 2020]
• CONTRACT Paper-II - By R. K. Bangia
• NOTES ON INDIAN CONTRACT ACT 1872: BEST NOTES FOR LAW STUDENTS