Breach of Contract
Definition
Section 82 (1) of the Contract Act 2056 contains ,"The contract is deemed to have been breached when: (i) any party does not fulfil liabilities under the contract (ii) any party thereto renounces his liability under the contract (iii) any party's conduct/ action shows his incapacity of performing the contract.
Types of Breach
There are two types of breach of any contract
a. Actual breach
b. Anticipatory breach
Features of Breach
A breach of contract:
§ May be expressed or implied
§ May be caused by any party to a contract
§ May be actual or anticipatory, by nature
§ May be either against to terms of contract or law of contract
§ May cause to terminate the contract
§ May be either by intention or incapacity of the parties
CONSEQUENCES OR REMEDIES FOR BREACH OF CONTRACT
When breach of contract occurs the aggrieved party or injured party becomes to the following remedies:
1. Rescission of the contract
The aggrieved party is freed from all the obligations under the contract and it is also called as EXONERATION.
2. Suits for damages
The aggrieved party is entitled to receive compensation for any loss or damage caused by breach of contract and can file a suit for getting a decree for damages.
3. Suits for quantum meruit
Quantum meruit means as much as is earned. Right to quantum meruit means a right to claim the price or compensation for the work already done. When a contract has been partly performed and which is breached, then the aggrieved party can, under certain circumstances, file a suit for the price of the work or service performed before breach of contract.
4. Specific performance of the contract
In the case of breach of contract, when the compensation is not possible and justifiable, court can direct to perform the contract. It signifies that the court can direct the party responsible for breach to perform the contract according to the agreed terms.
5. Injunction
Under certain circumstances, the court can issue an order upon a party whereby he is prohibited from doing something which amounts to a breach of contract.
Example
Ginder promised to buy whole of the electric energy required to his house. He breached the contract by purchasing some of requirements from other sources. Hence, he was held not to do so. In it, court ordered injunction – not to do beyond the agreement. (Case: METROPOLITAN ELECTRIC SUPPLY CO. vs. GINDER)
6. Restitution
Restitution is a remedy for breach of contract. It is based on Latin Principle "Restitution in integrum". It means returning everything to the state as it was before. The parties to a contract have to return the benefit to each other which was received under the contract. This is applicable to a contract 'discovered to be void'.
"Push yourself no one else is going to do it for you".
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