This article is written by Pradumn Nigam of University of Lucknow, Law Uttar Pradesh, an intern under Legal Vidhiya.
INTRODUCTION
The title of our research article is about Remedies for Breach of Contract. In this research article, I have examined serval cases and analyzed the cases, and then made several conclusions based on law Nd philosophy perspectives. [1]We have taken the most famous court cases in India and deeply researched on this topic to come up with some most real and genuine facts.
Though, the fact that we in our daily life knowingly or unknowingly breach contracts which may be legal contracts or social or moral contracts.
Nearly 30% of court cases in India are of breach of contracts. We humans who say we are social animals are Bounded by contracts all around our lives. The most important need for the formation of contracts was to buy and sell goods within our society with each other. It is said that contracts were first invented by Rulers, but in the legal world, the first contract definition was given by THOMAS HOBBES. [2]
ISSUE ON BREACH OF CONTRACT
A breach of contract occurs when one party fails to fulfill their obligations under a contract without a lawful excuse. This can take many forms, such as failing to deliver goods or services on time, providing goods or services that do not meet the agreed-upon specifications, or failing to make payment as agreed.
When a breach of contract occurs, the other party may be entitled to legal remedies, such as damages or specific performance (i.e., requiring the breaching party to fulfill their obligations under the contract). The specific remedies available will depend on the nature of the breach and the terms of the contract. It is important to note that not all breaches of contract will result in legal action, as parties may seek to negotiate a resolution outside of court.
More issues for breach of contract
There are a variety of issues that may arise in a breach of contract case, depending on the circumstances of the specific situation. Here are a few examples:
Material vs. minor breach: A material breach is a failure to perform a significant term of the contract, such as failing to deliver goods altogether. A minor breach is a failure to perform a minor term, such as delivering goods a few days late. The remedies available to the non-breaching party will depend on the severity of the breach.
Anticipatory breach: This occurs when one party indicates that they do not intend to perform their obligations under the contract. This may happen, for example, if a supplier notifies a buyer that they will not be able to deliver goods as agreed. The non-breaching party may be entitled to damages even if the breach has not yet occurred.
Impossibility of performance: If a contract becomes impossible to perform due to unforeseen circumstances, such as a natural disaster or a change in law, the parties may be excused from their obligations under the contract.
Ambiguity in the contract: If the terms of the contract are unclear or ambiguous, it may be difficult to determine whether a breach has occurred. This may require interpretation by a court or arbitrator.
Mitigation of damages: If a breach occurs, the non-breaching party has a duty to mitigate their damages by taking reasonable steps to minimize the harm they suffer. For example, if a supplier breaches a contract to deliver goods, the buyer may be expected to seek alternative suppliers rather than simply waiting for the original supplier to deliver.
ABSTRACT
This research article is about the Remedies for Breach of Contracts of Sale and the moral value of humans regarding each other. We have taken the most recent supreme court of India cases and analyzed some remedies for breach of contract in India. The conclusion is printed on the last page of the article.[3]
Key Words: breach of contract, remedies, contracts in India, sale, business, economy, money.
INTRODUCTION
In the world in which we live breach of contract is a common and more often problem faced by each of us in our day-to-day life. For example, if me and my friend paid equally to buy chocolate and we made an oral contract that we will sell that chocolate to another student at high prices and will distribute profits amongst us.[4] But for some reason I was in the staff room, meanwhile my friend sold that chocolate during the interval to another student and earned double the profit and is not sharing any money with me. Then we can say that I was a victim of a breach of contract from my friend. There are thousands more examples of breach of contract in our personal as well as in our professional lifestyles. So, let’s examine some famous supreme court cases to develop some new remedies for breach of contract of sale.
CASES STUDY
The first case-
Bhajan Singh Hardit Singh and co… Vs Karson Agency (India)and ors… [1967]718 SCC
The respondent ordered 500 yards of worsted (Wollen clothes). The respondent had given the advance of 1000Rs and 10,625Rs was his due amount, which the respondent was supposed to give after taking delivery. But the respondent did not show interest in taking delivery even after legal notice by the appellant clearing the point that if the respondent will not come and collect his goods and pay the due amount, the appellant will sell the good if the respondent will not come and collect his goods within 4 days. But the respondent did not show any interest in taking his ordered goods. So, the appellant sold the clothes bearing a loss of 3,392Rs. So, under 15 and section 24 of the limitation, the case judgment was passed in Favour of the appellant.
Second case-
Oil and Natural Gas Corporation Ltd. Vs Saw Pipes Ltd… [1996]2 SCC
The landmark judgment was produced by the Supreme Court of India saying that the arbitral tribunal court judgment is correct and ONGC can’t deduct money from the full payment of the contract just because of delay. The delay was because of the strike in Europe from where the machinery part was supposed to come for reselling to ONGC and therefore there was no fault of saw pipes Ltd found. And the rule of law should be followed by tribunal law. Hence judgment was passed in favor of saw pipes and so ONGC appealed to the supreme court where the court favored the judgment of the tribunal. And rejected the plea of ONGC. The case was dismissed under section 34 (2)(a)(5).
The third case-
M/S Kailash Nath Associates Vs Delhi Development Authority [2015]193 SCC
The case is regarding a plot in Delhi whose auction was done. Under this Kailash Nath bid the highest money and was ordered to pay advance half the money before the and half money after some time, But Kailash Nath failed in paying the money on time. So as per the rule the bid was canceled, and advance money was not refunded. So, Kailash Nath filed a case in the high court where the first bench decided to return the advance money, but the second bench decided not to refund advance money as a breach of contract.
The appellant moves to the supreme court of India, where the court reversed the judgment saying the advance money should be refunded by DDA (Delhi Development Authority) under section 74 of the Indian Contract Act,1872.
BASIC PROBLEM IN THE INDIAN CONTRACT SYSTEM
The basic problem which I found in my research on Indian contract law is not mentioning all the facts which can and cannot happen during the fulfillment of a contract. And clear punishment regarding failure or delay of a particular point in the contract. And compensation in case of failure or delay of contract in the amount of the pain and loss caused by failure or delay of contract.
SOLUTION FOR BREACH OF CONTRACT
When a party breaches a contract, the other party may seek remedies to recover damages or losses incurred as a result of the breach. The remedies available will depend on the nature and severity of the breach, as well as the terms of the contract and applicable laws.
Here are some of the common remedies available for breach of contract:
Damages: The most common remedy for breach of contract is the award of damages. The non-breaching party can seek to recover the monetary losses caused by the breach, including compensatory damages for actual losses, consequential damages for losses that were a foreseeable result of the breach, and sometimes even punitive damages for particularly egregious breaches.
Specific performance: In some cases, damages may not be an adequate remedy for the breach, such as when the contract involves a unique or irreplaceable item. In such cases, the non-breaching party can seek an order of specific performance, which requires the breaching party to perform their obligations under the contract.
Rescission: If the breach is so severe that it essentially nullifies the contract, the non-breaching party can seek rescission, which cancels the contract and restores the parties to their pre-contractual position.
Reformation: If there was a mistake or ambiguity in the contract that led to the breach, the non-breaching party may seek reformation, which involves correcting the mistake or clarifying the ambiguous terms to reflect the parties’ original intent.
Mitigation: The non-breaching party has a duty to mitigate their damages, which means they must take reasonable steps to minimize their losses caused by the breach. Failure to mitigate damages can limit the amount of damages the non-breaching party can recover.
It’s important to note that the availability and scope of these remedies can vary depending on the specific facts and circumstances of each case, as well as the governing law and jurisdiction. Therefore, it’s advisable to consult with a lawyer if you are considering pursuing remedies for breach of contract.
CONCLUSION
The conclusion regarding this research article on problems in Indian contract law many things are not in the hands of any humans, so humans should understand each other problems and should claim compensation only in case of monetary loss and damage or in case of harsh damage caused. [5] And efforts should be made to clarify all points within the contracts. And the court should examine all the circumstances for breach of contracts.
REFERENCES
1. https://www.tandfonline.com/doi/abs/10.5235/096157610792240740?journalCode=rklj20
3. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3198563
4. https://www.legalserviceindia.com/laws/contracts.htm
[1] https://www.toppr.com/guides/business-laws-cs/indian-contract-act-1872/remedies-for-breach-of-contract/
[2] https://blog.ipleaders.in/remedies-for-breach-of-contract-under-the-indian-contract-act/
[3] http://jec.unm.edu/education/online-training/contract-law-tutorial/remedies-for-breach-of-contract
[4] https://www.vedantu.com/commerce/remedies-for-breach-of-contract
[5] https://www.legalserviceindia.com/legal/article-4012-remedies-for-breach-of-contract-under-specific-relief-act-and-code-of-civil-procedure-a-critical-study.html
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