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Unit 6: Remedies for Breach of Contract

Vindictive or punitive damages. These damages are awarded with a view to punish the defendant Notes
and not solely with the idea of awarding compensation to the plaintiff. These have been awarded
(a) for breach of a promise to marry; (b) for wrongful dishonour of a cheque 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.

Task
Discuss an example related to liquidated damages and Penalty.

6.2.1 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.

6.2.2 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.

6.2.3 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.

6.3 Freedom to Contract

The Parties to a Contract, in a Sense, Make the Law for Themselves

The law of contract differs from other branches of law in a very important aspect. It does not
lay down so many precise rights and duties which the law will protect and enforce; it contains
rather a number of limiting principles subject to which the parties may create rights and duties

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