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Module 8

Breach of Contract And Relief


Section 73
• Breach: Anticipatory or on the date of
performance.
• Types of damages:
1. Unliquidated
2. Liquidated
3. penalty
Measure of damage : remoteness of
damage
• Case: Hadley v. Buxendale
1. Damages should be fairly and reasonably
arising naturally out of the usual course of
the things.
2. Reasonably contemplated by both the parties
at the time of the formation of the contract.
Case: Victoria Laundry (Windsor)Ltd v. Newman
Industries Ltd.
Case: Dominion of India v. All India Reporter Ltd.
• Measure of damage should be proximate and
not remote in nature.
• the damage shall be measured on the basis of
the price of the goods on the date of the
breach.
• Duty to mitigate the loss: if the plaintiff has
the power to mitigate any further loss after
the breach has been done, the same should
be undertaken.
Case: Nanajappa v. Muthuswamy
Liquidated damages and the penalty
• Liquidated damages: when at the time of the
formation of the contract the loss that would be
caused is already pre-estimated.

• Penalty: when at the time of the formation of the


contract, the compensation agreed to be paid for
any breach is highly excessive and
disproportionate; it is basically to discourage the
breach of contract.
Case: Dunlop Pneumatic Typre Co. v. New Garage
and motor Co.
Quantum Meruit
• When part performance has been done
• Subsequently the contract is cancelled or
breach takes place.
• The party who has already partly performed
will be remunerated for the part done by him.

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