Legal Aspects of Business Unit – I Breach of contract 6/15/2018 Unit I - Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA

Rescission of the contract Rescission means a right not to perform an obligation. In case of breach of contract the promisee need not perform his obligation, he is not only discharged from his liabilities but also he is entitled to claim compensation for damages which he might have sustained due to non performance of the contract. [Section 39]

DAMAGES Damages are a monetary compensation allowed to the injured party by the court for the loss or injury suffered by him by the breech of the contract. The objective of awarding damages for the breech of contract is to put the injured party in the same position as if he had not been injured. This is called the doctrine of restitution. The fundamental basis is awarding damages for the pecuniary loss.

Suit for damages Damages are monetary compensation allowed to the injured party for the loss suffered. The object of awarding damages is not to punish the party at fault but to make good the financial loss suffered by the injured party due to breach of contract.

QUANTUM MERUIT The phrase quantum meruit literally means ‘as much as earned’.A right to sue on a quantum meruit arises when a contract, partly performed by one party, has been discharged by breach of contract by the other party.This right is performed not on original contract but on implied promise by other party for what has been done.

Quantum Meruit When an agreement is discovered to be void. [Sec 65] When something is done without any intention to do gratuitously. [Sec 70] When there is an express or implied contract to render service but no agreement as to remuneration. When the completion of the contract has been prevented by the act of the other party to the contract. When a contract is divisible. When an indivisible contract is completely performed but badly.

SPECIFIC PERFORMANCE In certain cases of breach of contract damages are not an adequate remedy. The court may, in such cases, direct the party in breach to carry out his promise according to terms of the contract. This is a direction by the court for specific performance of the contract at the suit of the party not in breach Cases for specific performance to be enforced 1)when the act agreed to be done is such that compensation is not adequate relief.2)when there is no standard for ascertaining the actual damage 3)when it is probable that compensation cannot be agreed to be done.

Specific Performance The remedy of Specific Performance is in the nature of equitable remedies based on the principles of equities. Among the remedies are specific performance, injunction, rectification and cancellation of instruments and rescission of contract. In the discretion of the court, specific performance may be enforced: where there is no standard for ascertaining the actual damage caused by the non-performance; or where compensation in money for the non-performance would not afford adequate relief.