Page 88 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes 3. ............................. provides that if the parties agree in their contract that whoever commits
a breach shall pay an agreed amount as compensation, the court has the power to award a
reasonable amount only, subject to such agreed amount.
4. The ............................. of the special circumstances is a prerequisite to the claim for special
damages.
5. ............................. 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.
6. The phrase ............................. means as much as is merited (earned).
7. The ............................. differs from other branches of law in a very important aspect.

8. The freedom of the parties is limited by ............................. .
9. The .......................... cannot be claimed for any remote or indirect loss or damages by reason
of the breach.

6.7 Review Questions

1. What are the different ways in which a breach of contract may arise?
2. Whether time is the essence of a contract or not?
3. What are the main types of remedies for breach of a contract?
4. State the principles on which damages are awarded for breach of contracts.
5. Give some examples of ordinary damages. Can ordinary damages be claimed for any
remote or indirect loss or damage by reason of the breach?
6. Give some examples of special damages. Is it that the communication of the special
circumstances a prerequisite to the claim for special damages?
7. What is meant by liquidated damages and penalty?

8. What is specific performance? Under what circumstances, it is (i) granted (ii) not
granted?
9. What is a penalty clause? Why is it that the court will not enforce a penalty clause?
10. Explain (i) exemplary damages (ii) quantum meruit.

Answers: Self Assessment

1. breach of contract 2. Compensation
3. Section 74 4. communication
5. Injunction 6. ‘quantum meruit’

7. law of contract 8. two factors
9. ordinary damages

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