Chapter 1: The Indian Contract Act, 1872

UNIT – 5: BREACH OF CONTRACT AND ITS REMEDIES

After studying this unit, you would be able to understand-

1. Understand the concept of breach of contract and various modes thereof.

2. Be clear about how the damages are to be measured.

INTRODUCTION

We have so far seen how a contract is made, the essential of a valid contract and also how a contract is to be performed as well as how a contract may be put an end. We shall now discuss about the breach of contract and also the mode in which compensation for breach of contract is estimated. Breach means failure of a party to perform his or her obligation under a contract.

Breach of contract may arise in two ways: (1) Actual breach of contract (2) Anticipatory breach of contract

SUMMARY

1. In case of breach of contract by one party, the other party need not perform his part of the contract and is entitled to compensation for the loss occurred to him.

2. Damages for breach of contract must be such loss or damage as naturally arise, in the usual course of things or which had been reasonably supposed to have been in contemplation of the parties when they made the contract, as the probable result of the breach.

3. Any other damages are said to be remote or indirect damages, hence, cannot be claimed.