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Remedies For Breach of Contract

The document summarizes various remedies available to buyers and sellers for breach of contract under Indian contract law. It discusses how under Section 55, if a buyer refuses to pay for goods, the seller can sue for the price. It also explains that under Section 56, if a buyer refuses goods or defaults on payment with mala fide intention, the seller can sue for damages. Additionally, it outlines remedies available to buyers, including suing sellers for non-delivery of goods under Section 57 or specific performance under Section 58 if goods are specific.

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Nitin Dhaterwal
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150 views18 pages

Remedies For Breach of Contract

The document summarizes various remedies available to buyers and sellers for breach of contract under Indian contract law. It discusses how under Section 55, if a buyer refuses to pay for goods, the seller can sue for the price. It also explains that under Section 56, if a buyer refuses goods or defaults on payment with mala fide intention, the seller can sue for damages. Additionally, it outlines remedies available to buyers, including suing sellers for non-delivery of goods under Section 57 or specific performance under Section 58 if goods are specific.

Uploaded by

Nitin Dhaterwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Remedies for breach of

contract
By: Ms. Manan Dardi
Email id: [email protected]
1. Suit for price (Sec 55)

• Acc to Sec 55, if the ownership of goods has been transferred to the buyer
and he refuses to make the payment for the goods, the seller has the right to
file a suit against the buyer.

• Acc Sec 55(2), if according to the terms of the contract of sale, the payment
for the goods is to be made by a certain time or date by the buyer and such
payment has not been made, the seller has the right to sue the buyer even if
the ownership of goods has been transferred to the latter.
2. Suit for damages (Sec 56)

• Acc Sec 56, if the buyer refuses to accept the goods or default in
making the payment for them with a malafide intention, the seller has
the right to file a suit against the buyer for damages.
Measure of Damages
(Sec 73 & 74 of the ICA)
The leading rules are as under:

i. Where there is an available market for the goods in question, the measure of
Click to add text
damages is the difference between the contract price and the market price at
the date of the breach.

ii. Where there is no such market, the measure of damages is the estimated loss
directly and naturally resulting in the ordinary course of events, from the
breach of the contract.
Example

• X and Y entered into a contract for the sale of wheat. X had to deliver
100 bags of wheat to Y on 15th of the month. Y refused to take delivery
on 15thand on that day the price of one bag was Rs 5, 000. A suit was
filed by X for non-acceptance on 20th of the month and on that day the
market price for a bag of wheat was Rs 4,500. For the purpose of the
suit, the market price will be considered as Rs 5,000.
Buyer’s Remedies against the Seller
1- Damages for non-delivery

• Section 57 states that, whenever any seller refuses to deliver the goods to
the buyer, the buyer may sue for non-delivery of goods. If the buyer has
paid any amount he is entitled to recover it. Quantum of damages is
decided through market forces, contract and market price on the day of the
breach is considered as damages. If the buyer wants to claim that damages
he must prove it in the court of law, otherwise, he cannot get a penny more
than refund i.e the amount he has already paid.
Example

• A who agrees to sell to B 10 pair of shoes for 1000/- each. B was


going to sell the same shoes to C for 1100/- a pair. A neglects to
deliver the goods to B. Now, B can sue A for non-delivery. He can sue
for the amount of 100/- per pair, i.e. 1000/- (the difference between
B’s cost price and sale price)
2- Suit for specific performance

• Acc to Section 58 when goods are specific or ascertained and there is a


breach of contract committed on the part of the seller then the buyer can
appeal to the court of law for specific performance. The seller has to
perform the contract and he does not have any option of retaining the
goods by paying damages. The power of the court to order specific
performance is subject to the provisions of chapter II of Specific Relief
Act, 1963.
Example

• There was a contract between A and B, that A will sell to B a very


expensive painting on a specific date. On the said day A refuses to sell.
B can approach the court, who orders A to sell the painting to B at the
ascertained price.
Example

• Thus on the sale of ship buyer was allowed to recover the ship specifically in the
case of Behnke V Bede Shopping, there was a ship named the city which holds a
unique value to the plaintiff but she was a cheap vessel being old but her engines
were new and   as to satisfy the German regulations and hence plaintiff could as a
German shipowner have her at once put on the German register. A very experienced
ship-valuer has said that he knew only one other comparable ship, but that may not
be sold. Thus, on sale of a ship buyer was allowed to specifically recover the ship.
3- Suit for breach of warranty

• As stated under Section 59, the buyer cannot reject the goods solely on
the basis of breach of warranty on the part of the seller or when a
buyer is forced to treat a breach of condition as a breach of warranty.
But he may sue the seller for damages or set up against the seller the
breach of the warranty in the extinction of the price.
Example

• The measure of damages is directly and naturally occurring loss in ordinary events
from breach of warranty. Mason V Burningham, the buyer of a second-hand
typewriter spends some money on getting it overhauled. Afterwards, the typewriter
was seized from her as stolen property. this was a breach on the part of the seller of
warranty of quiet possession. She was held entitled to recover damages including the
cost of repair. She did a natural thing in having the typewriter repaired and the
amount she had spent was a loss directly and naturally resulting from the breach.
Remedies available to both Seller and Buyer
1- Suit for anticipatory breach
• According to Section 60, the rule of anticipatory breach contract applies, wherein, if any party repudiates
the contract before the date of delivery the other party can consider the contract as rescinded and can sue
for damages of the breach.

• According to this Section, if one party repudiates before due date other has two courses of action. Either
he may immediately accept the breach and bring the action of damages the contract is rescinded and
damages will be assessed according to the prices then prevailing or he can wait for the date of delivery.
In the second case, the contract is open at risk and will be a benefit to both parties. Maybe the party
changes its mind and agree to perform and damages will be assessed according to prices on the day of
delivery
Example

• P is a seller and Q is a buyer. Q repudiates the contract before date, but P


does not accept the repudiation and keeps the contract alive. On the date
of performance, P delivers the products. But these are not according to
the specification of Q. in this case Q may reject the goods. P will not be
able to avail any remedy. Or Q may accept the goods and treat the breach
of condition as a breach of warranty and recover damages from P.
2. Suit for interest (Sec 61)

• Acc to Sec 61, the unpaid seller has the right to be paid interest by the
buyer for any delay in making the payment. Such interest is affective
from the date when the price is payable.
THANK YOU

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