Business Law

The problem mentioned in the case can be discussed broadly under the Contract Act 1872.
Contract Act 1872 is the governing act for regulating any types of contracts according to the law
of Bangladesh. Contract Act 1872, constructed based on the English common law, was passed by
the British parliament with a view to ruling the colonial Indian subcontinent. Law of Contract
deals with nature, formation, operation, interpretation and dissolution of the contract. There are
various ways for a contact to be dissolved. Breach of contract is one of those ways which means
failing willy-nilly to perform any term of a contract without a legitimate legal excuse. In this
case we are discussing about, there is a clear breach of contract by one party (the promissor).
Breach of contract is followed by section 54 of the Contract Act 1872. When there is a breach of
contract the affected party can always ask for one or other of some remedies like damage,
Specific performance, injunction, cancellation of the instrument and rectification of the
instrument considering the conditions under which the contract was made. Damage is viewed as
universal remedy for the breach of contract. Depending on the situation the damage can be
nominal or substantial. Whatever it is, the victim always holds a right to sue for damages. Unlike
damage Specific performance is a discretionary remedy not a matter of right. Only the court
holds the right to decide whether it can be granted or not. Like specific performance Injunction is
another remedy for breach of contract which is discretionary in nature. Most importantly the
condition of having negative agreement, either expressed or implied, in the contract must be
fulfilled before a party can ask for injunction. Section 57 of Specific Relief Act 1877 needs to be
referred here in order to clarify whether the victim can ask for injunction or not.
The case is about two Indian idols who were brought into a contract with Ollo Bangladesh for
singing in a whole day concert. However, after their arrival in Bangladesh they suddenly made a
contract with another sponsor who offered them more amount than Ollo. Now, Ollo is taking it as
breach of contract and thinking of what step they can take against the singers because of facing a
huge loss due to it.
Firstly, Ollo is thinking about their damage which is tremendous as all arrangements were done
considering the concert. The word damage means monetary compensation for loss suffered.
Whenever a breach of contract takes place, the remedy of damage is the one that comes to mind
immediately as the consequences of breach. According to the law, damage is an award, normally
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of money which is said to be paid to a person as compensation for loss or injury. Damage can be
claimed in every case but the rules for damages can and frequently do vary based on the type of
claim which is presented. There can be two types of damages-nominal and substantial.
Nominal damages are accepted to follow as a conclusion of law when breach of contract has
been proven. Usually, the rule as to the measure of damages for breach of contract is the actual
loss sustained. The term nominal damage means a small sum awarded to a claimant whose legal
right has been precisely violated. Nominal damage constitutes a subcategory of general
damages1. Moreover, Nominal damages are recoverable where some legal right has been
infringed, but no actual loss or substantial injury has been sustained. Nominal damages are
awarded in recognition of the right and of the technical injury resulting from its violation. They
have been described as a peg on which to hang the costs. It is a small sum awarded in
recognition of a technical injury which has caused no substantial damage. Though the nominal
damages are not compensation for loss or injury but it is the recognition of a violation of rights,
in the absence of authority limiting an award of nominal damages, the nature of nominal
damages compels that the amount be minimal. These are not only recovered where no actual
damage resulted from an ascertained violation of right but also where actual damages have been
sustained, the extent of which cannot be determined. However to recover damages for an
emotional injury greater than nominal damages, a plaintiff must present evidence of an emotional
injurys character and severity.

It requires specific evidence of the nature and extent of the

harm. However, in certain cases, a plaintiffs testimony may be sufficient proof of mental
damages.

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1. General damages are those which the law presumes to flow from a twisted act.
It may be awarded without proof of any specific amount to compensate the
claimant for the injury done.

Substantial damages are special damages which compensate the claimant for the quantifiable
monetary losses suffered by a particular claimant. In the case of substantial damage claims made
in some areas of law prevent the claimant succeeding in its claim unless it proves to the
satisfaction of the court that it has suffered special damage. For example, extra costs, repair or
replacement of damaged property, lost earnings, loss of irreplaceable items, additional domestic
costs, and so on. Even they are seen in both personal and commercial actions.
Special damages can include direct losses such as amounts the claimant had to spend to try to
allay problems and consequential or economic losses resulting from lost profits in a business.
Special damages basically include the compensatory and punitive damages for the tort
committed in lieu of the injury or harm to the plaintiff.
Here, Indian idols have to pay substantial damages to the Ollo Bangladesh. As mentioned earlier,
Substantial damages are special damages which compensate the claimant for the quantifiable
monetary losses suffered by a particular claimant. It means, if one party suffered from loss by
another party, than the party has to compensate to the sufferer party. For example, if Mr. Rahim
is supposed to deliver a machine to Mr.Karim within 3 days, because without the machine an
important order from a foreign client cannot be started. However, Mr. X delivers the machine
after 6days and within those days Mr.Karim lost not only the clients order but also lost a huge
amount of profit. Here, Mr. karim can ask for substantial damages to Mr.Rahim as he lost his
profit from not taking this order. He asks for average amount of profit as compensation from
Mr.Rahim.

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From this case we can see that, at first Indian Idols agreed to sing for Ollo Company. Thats why
the company makes all the possible arrangement for the whole day long concert. However, after
their arrival in the airport, they make a contract with another sponsor as they offered them
handsome money. This caused damage for Ollo Company. By refusing to sing for the Ollo
Company, the Indian idols made a breach of contract with them. Not only that, the company
made the whole day arrangement like-selling tickets, hiring auditorium etc. Now, all these are
valueless. So, this causes a huge damage for the company.
For their (Ollo Company) such type of damages they can asks for substantial damages to the
Indian Idols , as from the definition we come to know that damages which bring about actual
economic loss is called substantial damages. The Ollo Company can ask for the amount which
they paid for their all arrangements and also the money which they had to pay back to the
spectators for buying their tickets.
Moreover, it is a Bangladeshi contract; and according to the Quasi-contract2 (Sec.-65), if any
party takes advance money from another party and then the party makes a breach of contract then
the party (which made a breach of contract) has to pay the advance money in full to the sufferer
party. Here, Indian idols also have to pay all the advances to the Ollo Company.
Point to be noted, if the Indian Idols had made a breach of contract which did not make any loss
for the Ollo company, than the Indian Idols would have to pay the nominal damages(Footnote -1)
to the Ollo Company.

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2.Quasi-contract: An obligation of one party to another imposed by law

independently of an agreement between the parties.

In this case, the Ollo Company wanted to know why they could not have any injunction. An
injunction rules an act that the court observes as necessary to justice, or it prohibits an act that is
considered to be different to good principles. It is an extraordinary remedy; keep for special
situation

in

which

the

temporary

preservation

of

the

status

is

needed.

In an easy way, we can say that, if any individual who has been given adequate notice of an
injunction but fails to follow the court's order may be punished for contempt of court.
For example to make a case against someone whose rights has been violated and necessary to
have justice, money damages would be of limited advantage. Some common reasons for
injunctions in Bangladesh are Stalking, Domestic violence, Harassment, Discrimination,
Bullying (in some cases) etc.

Injunction can be different types; a preliminary or temporary injunction is the need for
immediate relief. Preventive Injunctions a threatened injury or restrains the continued order of an
ongoing mistaken, but it cannot be used to right a completed wrong or to undo that which has
already been done. Mandatory Injunctions also restricted to control of an ongoing mistaken or
threatened action but it is Specific Performance of an act. Such as, it has been issued to taking
away of buildings or other structures wrongfully placed upon the land of another. Permanent
Injunctions are continuous provided that the conditions that produced them remain permanent.
According to the Contract Act, the singers cannot be compelled to sing for Ollo Bangladesh
(Lumley Vs. Wagner). The singers have the wish or right to decide whether they will sing for
Ollo or not. They cannot be hassled to do so. So, Ollo Bangladesh cannot force them to sing for
them.

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What is more, as we can see from the case, it is an affirmative agreement3 rather than a negative
one. It means that while doing the contract Ollo Company did not mention anything to the
singers about not singing for any other party during that period. So, the singers are not obliged to
make contracts with others during that time. In this situation, The Ollo Bangladesh cannot ask for
injunction as there is no injunction on affirmative agreement.
Point to be noted, during doing the contract, if Ollo Company had mentioned that the Indian
idols cannot make any contract with others, The Ollo company could have asked for injunction
as it would become a negative agreement then. In that situation, the Ollo Company could compel
them not to sing for the other sponsor but they could never hassle them to sing for them (Ollo).
Again, it is also mentioned in Sec 57 of Specific relief Act, 1877, if a person contracts to sell his
good will to another person and after selling it the other person similar business close to the first
persons shop and solicits his old customers to deal with him, this would be considered as a
contrary to his implied contract though the first person did not mention anything about the shop
setting while selling his good will. In this case, this would be automatically granted as a negative
agreement.

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3. Affirmative injunction refers to an injunction that requires a positive act on
the part of the defendant. Outside divorce, most injunctions are negative. As an
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example- if A contracts with B and during the contract, tells B that, he cannot
contract with anyone else during that period. This will be known as a negative
injunction not an affirmative one.

Considering the above arguments, we can say that Ollo company cannot compel the singers to
sing for them, but they can ask for substantial damages which they faced due to their denial for
not singing. However, they cannot ask the singers not to sing for other sponsor because they did
not mention in their contract that the singers cannot make any contract with other parties while
singing for them. On the contrary, the Indian idols have to pay substantial damages to the Ollo
Company and return the amount of money they had taken in advance to sing for Ollo.

Recommendations:
1)http://legal-dictionary.thefreedictionary.com/injunction
2)http://en.wikipedia.org/wiki/Injunction
3)http://www.law.cornell.edu/wex/Injunction
4)http://legalcatch.wordpress.com/2006/10/23/injunction-law-definition/
5)http://en.wikipedia.org/wiki/Damages

Name and ID:

1)
2)
3)
4)
5)
6)

Nandini BhattacharyyaSamiul AlamShudipta RoyNoorjahanNusrat Sharmeen Anika-10104060

Md. Zahid Imam 10104029
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