Page 79 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes by a banker possessing adequate funds of the customer. The measure of damages in case (a) is
dependent upon the severity of the shock to the sentiments of the promisee. In case (b), the rule is
smaller the amount of the cheque dishonoured larger will be the amount of damages awarded.
Nominal damages. These are awarded in cases of breach of contract where there is only technical
violation of the legal right but no substantial loss is caused thereby. The damages granted in such
cases are called nominal because they are very small, for example, a rupee. This small amount is
awarded as a matter of course.

7.1.3 Remedy by way of a Suit on Quantum Meruit

The phrase quantum meruit means as much as is merited (earned). The normal rule of law is that
unless a party has performed his promise in its entirety, it cannot claim performance from the
other. To this rule, however, there are certain exceptions on the basis of quantum meruit. A right
to sue on a ‘quantum meruit’ arises where a contract partly performed by one party has become
discharged by the breach of other party.

7.1.4 Meaning of Specifi c Performance

There are other remedies in a contract suit besides damages. The main one is specifi c performance.
Where damages are not an adequate remedy, the court may direct the party in breach to carry
out his promise according to the term of the contract. This is called specifi c performance of the
contract. Some of the instance where court may direct specific performance are: a contract for

the sale of particular house or some rare article (antique) or any other thing for which monetary
compensation is not enough because the injured party will not be able to get an exact substitute in

the market. However, specific performance may not be granted where (i) monetary compensation
is an adequate relief; (ii) the contract is of personal nature, e.g., a contract to paint a picture;
(iii) where it is not possible for the court to supervise the performance of the contract, e.g., a
building contract; (iv) the contract is made by an incorporated company beyond its object clause
as laid down in its memorandum of association.
7.1.5 Remedy of Injunction

Injunction means an order of the court prohibiting a person to do something where a party is in
breach of a negative term of contract (i.e., where he does something which he promised not to
do), the court may by, issuing an order, prohibit him from doing so. Thus where N, a fi lm star,
agreed to act exclusively for a particular producer for one year but she contracted to act for some
other producer, she could be restrained by an injunction to do so.

7.2 Rectification or Cancellation

When through fraud or a mutual mistake of the parties, a contract or other instrument does not
express their real intention, either party may institute a suit to have the instrument rectifi ed. In
such a case, if the Court finds that there has been a fraud or mistake, it may ascertain the real

intention of the parties, and may, in its discretion, rectify the instrument so as to express that
intention (Sec. 26 of the Specific Relief Act, 1963). But this must not prejudice the rights acquired

by third persons in good faith and for value. If rectification is not possible, the Court orders for
the cancellation of the contract.
A written document which is void or voidable against a person may cause him in some cases or
serious injury, if it is left outstanding. In such a case, if he has any such apprehension, he may

file a suit to have the document adjudged void or voidable and order it to be delivered up and
cancelled (Sec. 31 of the Specific Relief Act, 1963).

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