1. INDIAN CONTRACT ACT, 1872
Act lays down principles of
- formation,
- performance,
- enforceability
of contracts
And, rules relating to
Special type of contracts, viz.,
indemnity, guarantee, bailment, pledge &
agency.

2. Law of Contract
CONTRACT – S.2(h)
“An agreement enforceable by law”
or,
an agreement made with an intention to create a legal obligation
(enforceable by law)
AGREEMENT – S.2(e)
“Every promise and every set of promises
forming the consideration for each other”
PROMISE: S.2(b)
“When the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be
accepted. A proposal when accepted becomes a
promise”
An agreement is an accepted proposal.

3. What is a Contract?
Sec.2(h) – A contract is an agreement enforceable by
law.
The contract must be definite & its purpose should
create a legal relationship.
The agreements must satisfy two things viz.,
i) Intention to be bound, &
ii) consideration

4. Essentials of Contracts
1. Agreement
2. Legal Obligation
3. Free & Genuine Consent
4. Parties Competent to Contract
5. Lawful Consideration
6. Lawful Object
7. Agreement not declared Void
8. Certainty of Meaning
9. Possibility of Performance
10. Necessary Legal formalities

5. Agreement
 Has 2 elements viz.,
i) A proposal/offer, and
ii) Acceptance of that proposal/offer
 Offeror and Offeree – 2 parties
 Same thing in same sense – consent
A contract which is an agreement enforceable in law
has two elements viz;
i) An agreement
ii) Legal obligation

6. Agreement
Offer or Proposal
When a person indicates to another,
his willingness to do or abstain from doing
anything, with a view to obtaining an assent of
that other person to such act or abstinence,
he said to make a proposal or offer
Acceptance
when the person to whom the proposal is
made signifies his assent thereto, the proposal
is said to be accepted.
In other words, acceptance is the
manifestation of the offeree of his consent to
the terms of the offer.

7. Legal Obligation
 Intention to create legal relationship
 Belfour Vs Belfour Case (1919) –Social/Domestic
agreements not contract. Parties didn‟t intend to create
legal relations
 Commercial or social, domestic agreements must
have some presumptions to show legal obligations to
be a contract

8. Free & Genuine Consent
 Contract should not be obtained by
- misrepresentation
- Fraud
- Undue influence
- Coercion
- mistake
 If any of above flaw exists in a contract it will be
held as void

9. Parties Competent to Contract
 Who is a competent party?
 Of majority age i.e., not a minor
 Of sound mind –
lunatic, idiot, drunkenness, status
 Not disqualified by any law to which he is
subject
 Flaw if any, contract becomes
unenforceable, except in exceptional
circumstances

10. Lawful Consideration
 Is price for the promise of the other – need not be in
terms of money
 If not supported by consideration – bare
consideration – nudum pactum – contract not
enforceable
 Must be real & lawful
 Each party must promise something and receive
something

11. Lawful Object
OBJECT
 Not disapproved by law
 Does not defeats any provision of law
 Where it is not fraudulent
 Not injurious to another person or property
 Not immoral
 Not opposed to public policy

12. Agreement not declared Void
 Although an agreement contains all the elements
yet, certain agreements are declared illegal or void
agreements, such as;
Restraining marriage
Restraining trade
Restraining legal proceedings
Wagering agreements

13. Certainty of Meaning
 Specific (say cloth, oil type)
 Shouldn‟t be vague
 Punit Beriwala Vs. Suva Sanyal (1998) – Agreement
to agree

14. Possibility of Performance
 Agreement to do an act impossible –cannot be
enforced
Eg; Discover treasure by magic
 Based on the maxim – Law does not compel to do
what is impossible
(Lex non cogit ad aimpossibilia)
 At the time of entering into contract, was capable of
being performed, but subsequently become
impossible or unlawful – Known as doctrine of
supervening impossibility, doctrine of frustration

15. Necessary Legal formalities
 Contract may oral or in writing
 However, certain cases documented, comply with
formalities of writing, registering, attestation, stamp
duty
 Made in presence of a witness
 Agreements which must be writing
- time barred debt
- arbitration agreement
- lease agreement for more than 3 yrs.
- contract of insurance
- negotiable instruments
- memorandum & article of association
- transfer of immovable property & so on

16. Necessary Legal formalities
 Contracts which must be registered:
- promise w/o consideration out of natural love &
affection between parties of near relation
- documents u/s 17 of Registration Act
- transfer of immovable properties under TPA,1882
- Memorandum & Art. Of Association, Mortgage
and Charges under Co.Act,1956

17. Necessary Legal formalities
Instruments those chargeable under Indian
Stamps Act,1894
- Negotiable instruments
- Insurance Policy
- Partition Deed
- Share/ Debenture Certificates
- Pledge
- Mortgage Deeds
Unstamped or under stamped , improperly
stamped instruments not admitted in evidence

18.  All essential elements must exist together in a
contract, to be a legal and valid agreement or simply
called a contract
 But, if any one of the elements is missing, the contract
is either voidable, void, illegal or unenforceable in law

19. Types of Contracts
Contracts are classified in terms of their :
1. Validity or enforceability
2. Mode of formation
3. Performance

20. 1. Validity or enforceable contracts
 Valid Contract
- Has all essential elements
 Voidable Contract
 Void Contract
 Illegal Contract
 Unenforceable Contract
- Some elements are missing

21. Voidable Contract
 Affected by a flaw, say misrepresentation, fraud,
coercion, undue-influence, mistake
 which may repudiated at the option of of aggrieved
party
 Till it is set aside, it remains valid & binding
(patient-medical attdt-undue infl.)

22. Void Contract - S.2(i)
 An agreement not enforceable by either of
the parties to it, is void (restitution)
 Such agreement is w/o any legal effect ab-
initio (eg; engaging auditorium, destroyed – fire before function)
 eg, contract with minor, mistake of
fact, unlawful object/consideration, w/o
consideration, restraint of
marriage/trade/legal proceedings, uncertain
/wagering/impossible
agreements, agreement to entering into
agreement in future
 Contract valid at formation, becoming void
later – subsequent impossibility/illegality

23. Illegal Contract
Where object or consideration is:
Forbidden by law
Defeats provision of a law (Contract for wheat-Govt.
ordnanace-sale wheat only from fair price shop)
Fraudulent
Involves injury to person/property
Immoral under law
Opposed to public policy
Wagering agreement (in Mumbai)
(agreemnt div. of gains acqrd by fraud/promise-employt for payment)
(A bets with B, losses, reqst C 4 loan, C pays B/settles A‟s loss. C cannot
recover from A)

24. Unenforceable Contract
 They are neither void or voidable
 Cannot be enforced in court as it lacks
some item of evidence such as
writing, registration or stamping
 Unstamped /under stamped, if stamp
required for merely revenue, defect can
be cured by affixing required
stamp/penalty.
 Technical defects cannot be cured.
Remains unenforceable eg, un-stamped
negotiable instrument

25. 2. Mode of Formation
 Express Contract
Where the terms of the contract are stated
clearly in words – written or spoken
 Implied Contract
Where terms of contract are inferred from
conduct of parties or circumstances (Bus travel)
 Quasi-contracts
(Essence of a valid contract is on agreement)
Sometimes, obligation is created by law, where an
obligation is imposed on a party & action is allowed to be
brought by another party
(providing necessaries for minor/ leaving goods in another‟s place by
mistake-use)

26. 3. Performance
 Executed Contract
Where parties have completely performed their obligations &
nothing remains to be done
 Executory Contract
Where parties have still to perform their share of obligation;
something has been left out still to be performed by both the
parties. (Union of India Vs. Chaman lal Loona(1957)
 Uni-lateral
(pays bus fare-one party has fulfilled his part)
 Bi-lateral
(A contract is a contract from the time it is made & not from the time
of performance is due.Performance can be at the time contract is
made or it can be postponed either in full or part)

27. OFFER
„When one person signifies to another, his
willingness to do or to abstain from doing
anything, with a view to obtaining the consent
of that other person towards such act or
abstinence, he is said to be making an offer or
proposal.‟

28. Types of Offer
Express Offer
Implied Offer
Specific Offer
General Offer
The offer is the starting point in the process of
making an agreement
Every agreement begins with one party offering to
do/sell something or to provide a service etc

29. Essentials of an Offer
i) Terms of must be definite, unambiguos, & certain or
capable of being made certain
ii) Every offer should be communicated, ie., offeree must have
the knowledge of the offer
iii) An offer cannot contain a term, the non-compliance of
which would to amount to acceptance
iv) Offer must have a intention of creating a binding, mere
statement does not amount to an offer
v) Must have intention to create a legal relationship
vi) Must be made with a view to obtain assent thereto
vii) If no time is fixed within which the offer is to be
accepted, the offer does not remain open for an indefinite
period
viii) A offer must be distinguished from a mere invitation to
offer
ix) Offer may be „positive‟ or „negative‟
x) Two identical cross-offers do-not result in a contract

30. Acceptance
Definition:
„An acceptance is the act of manifestation by the offeree
of his intention to the terms of offer and willingness to
be bound by the terms of the offer communicated to
him.‟
 An agreement emerges from the acceptance of an
offer.
 Acceptance is the second stage of a contract.

31. Essentials of Valid Acceptance
i) Must be absolute & unqualified & according to
the terms of offer
ii) To be made by the offeree
iii) Communicated to the offeror
iv) After receiving the offer
v) Before the offer lapses-within the time period
vi) Mode of Communication, if any, must be as
prescribed in the offer
vii) In case of rejection of offer – a renewal of
offer required

32. Consideration
Definition:
It is the price for which the promise of the other is
bought.
A contract is basically a bargain between two parties,
each receiving „something‟ of benefit to them. This
„something‟ is described as consideration.
Eg., Price for the goods sold

33. Essentials of Consideration
Essentials for a valid Consideration:
i) At the desire of the promisor
ii) May move from the promisee or any other person
iii) Must be an act, abstinence or promise
iv) May be past ,present or future
v) Need not be adequate
vi) Must be real & competent
vii) Must be legal

34. No Consideration, No Contract
The general rule :
‘ex-nudo-pacto non-oritur actio’ i.e.,Out of a naked pact,
no cause of action can arise.
An agreement without consideration is void.
A promise in order to be enforceable must have
consideration, because only a consideration can
establish legal obligation & create legal rights
between the parties

35. No Consideration, No Contract
Consideration is the very essential element of any
contract to create legal rights between the parties
The law insists on existence of consideration if a
promise is to be enforced as legal obligation
The law provides no remedy to compel a party to
perform his promise on an agreement made
without consideration
A promise without consideration is null & void.

36. Exceptions to the Rule
Rule: (Sec.25) Agreement without consideration is void
However, consideration not necessary in:
i) Agreement made on account of love & affection
ii) Compensation for past voluntary service
iii) Promise to pay a time-barred debt
iv) Gifts
v) Agency

37. Doctrine of Privity of Contract
Relationship subsisting between the parties with
contractual obligations.
Implies mutuality of will & creates a legal bond or
tie between the parties
It has 2 consequences:
1. Person not party to a contract cannot
sue, even though the contract is for his benefit
& he has provided consideration.
2. A contract cannot confer rights or impose
obligation arising under it on any person other
than the parties to it. Eg, if there is contract
between A & B, C cannot enforce it.

38. Capacity of Parties
Essential element of enforceability agreement:
Parties should possess contractual capacity (S.10)
Contractual Capacity: Not defined
A person who is major, of sound mind, and
is not disqualified from contracting by law
is competent to enter into a valid contract
(S.11) – inference of contractual capacity: contracting
parties should be capable of understanding it
and of form a rational judgment of its effect
on their interest. They should also not be
disqualified by law to enter into a contract

39. Persons Not Competent to Contract
(S.11)
Mental Deficiency
i) Minors
ii) Of Unsound Mind
a) Idiots b) Insane c) Drunkards/intoxicated
Legal Disability
iii) Disqualified by law
a) Aliens b) Foreign sovereigns & ambassadors c) Convicts
d) incorporated institutions like joint stock companies, societies,
trusts etc. e) insolvents f) married women (prior to 1956)

40. Minor
 A contract with a minor is void ab-initio
 (In England- minor contract is voidable at the option of minor)
 A minor cannot be asked to refund any benefit received under a void
agreement
 He is not estopped to plead minority even where he falsely represents
himself to be of full age
 A minor „s contract cannot be ratified by him on attaining majority
 He cannot be a partner in a partnership firm. He can be admitted to the
benefits of an already existing partnership
 Minor can be a promisee or a beneficiary, He cannot bind himself by a
contract, but there nothing in Act which prevents him from making other
party to be bound to the minor.
 His estate is liable to a person who supplies necessaries of life to him
 His parents/guardians are not liable to a minor‟s creditor‟s on his breach
of contract
 He can be an agent

41. Free Consent
(S.13) defines consent as “ Two or more persons are said
to consent when they agree upon the same thing in
the same sense.”
Free Consent (S.14): consent is said to be free when it is
not caused by –
i) Coercion
ii) Undue influence
iii) Fraud
iv) Misrepresentation
v) Mistake
A contract to be valid it is not only necessary that parties
consent, but also that they consent freely
Where there is consent, but not free consent, the contract
is voidable at the option of the party whose consent
was not free

42. Coercion
Coercion is a committing or threatening to commit some
act which is contrary to law
Consent is said to be caused by coercion when it is
obtained by either of the following acts:
i) Committing or threatening to commit any act
forbidden by the IPC, or
ii) Unlawful detaining or threatening any property
Duress: English equivalent of coercion
Consequence of Coercion: when consent is caused by
coercion, the contract is voidable at the option of the
party whose consent was obtained.

43. Undue Influence
A contract is said to induced by undue influence where:
i) A party is in a position to dominate the will of the
other, and
ii) Is in a position to obtain unfair advantage over the
other
Dominating position may be:
i) One dominating, holds a real or apparent authority
over other eg. Master-servant
ii) Dominator stands in fiduciary relation to other
eg, father –son
iii) Dominator makes a contract with a person whose
mental capacity is temporarily/permanently affected
eg, old illiterate person
It‟s a voidable contract

44. Fraud
Fraud is a misrepresentation of facts made to induce
to enter into a contract with intention to deceive
or cheat.
includes:
a) The suggestion, as a fact, of that which is not
true by one who does not believe it to be true.
b) Active concealment of a fact by one having
knowledge or belief of the fact
c) A promise made without intention of
performing it
d) Any other act fitted to deceive
e) Any such act or omission which law declares to
be fradulent

45. Misrepresentation
Misrepresentation means an innocent mis- statement of
fact to the contract made by one party to induce the
other to enter into a contract. (no desire of deceiving
or defraud)
Classified into 3 groups:
1. A +ve assertion, in a manner not warranted (by the
information of the person making it), of that which is
not true, though believes it to be true.
2. Any breach of duty which, without intent to deceive
gives advantage to the person committing it, by
misleading another to his pre-judice
3. Causing, however innocently, a party to an agreement
to make a mistake as to the substance of thing which
is subject of agreement

46. Misrepresentation
Consequences:
Party wronged can;
1. Avoid agreement, or
2. Insist contract be performed & he be put in position in which he
would have been, if the representation made had been true
Unlike fraud, misrepresentation doesn‟t entitle a party to claim
damages (subject to exceptions)
Exceptions:
 Breach of warranty of authority of an agent. Where agent believes
that he has authority to represent the principal, while in fact he has
no such authority, agent liable to damages, though he is guilty of
innocent representation
 Negligent representation made by one person to another between
whom a confidential relation exists, solicitor – client, father –
daughter.
 However, if the party whose consent was caused by
misrepresentation had means of discovering truth with ordinary
diligence, he has no remedy.

47. Distinction between
Misrepresentation & Fraud
1. Fraud is committed with intention to deceive while
entering into contract, whereas in misrepresentation is
due to innocence, without intention to deceive or gain
advantage.
2. Both voidable at the option of the wronged. But, in
case fraud, party wronged gets additional remedy to
sue for damages. In misrepresentation claim for
damages arises only in exceptional cases.
3. In both cases contract can be avoided.
However, in case of misrepresentation, if the party
whose consent is caused had the means of discovering
the truth with ordinary diligence, contract cannot be
avoided.

48. Mistake
Mistake means erroneous belief or wrong notion
concerning some fact.
 Consent is not free when agreement is entered into under
mistake. Parties entering into contracts should not be under
any error
 They must agree on the same thing in the same sense
 „Consensus ad-idem‟ must be present
 Salomon describes contracts as “error in cause”
Consequence:
Mistakes render a contract void. Party complaining of the
mistake may repudiate it, i.e., need not perform it.
If executed, party receiving any advantage must restore , or
compensate for it, as soon as the contract is discovered to
be void.

49. Types Mistakes
Two types:
1. Mistake of Law
2. Mistake of Facts
Mistake of Law
i) Mistake of the law of the land
ii) Mistake of foreign law
iii) Mistake of private right of the parties
Mistake of Fact
I) Bilateral mistake
II) Unilateral mistake

50. Mistake of Law
1. Mistake of law of land:
The rule is “ignorance of law is no excuse”
A contract is not voidable because it was caused by a mistake as to any
in force in India.
2. Mistake of foreign law:
The maxim “ ignorance of law is no excuse” applies only to law of the
country & not to foreign law.
The mistake of foreign law is treated as mistake of fact
S.21 – “A mistake as to a law not in force in India has the same effect
as a mistake of fact.”
3. Mistake of Private right of the parties:
Mistake of the private right of the parties is also excusable.
Such mistake stands on the same footing as the
mistake of fact & the contract can be avoided on the
ground of mistake

51. Mistake of Fact
1. Bilateral mistake:
When both parties are under a mistake of fact
essential for the agreement, the mistake called
bilateral mistake of fact & the agreement is void
(An erroneous value of the thing which forms subject
matter is not to be deemed a mistake as to matter of
fact)
Bilateral mistake may be:
A) Mistake as to the subject matter
B) Mistake as to the possibility of performance

52. Mistake of Fact
Mistake as to the subject matter
The subject matter may be of reg:
i) Existence
ii) Identity
iii) Title
iv) Quality
v) Quantity
vi) Price
Mistake as to the possibility of performance
If both parties believe that the agreement is capable
of being performed though it is not, the agreement is
void

53. Mistake of Fact
Unilateral mistake:
When one of the contracting parties is at mistake it is
known as unilateral mistake. Generally in such situation
the contract is not invalid.
S.22- “A contract is not voidable merely because it was
caused by one of the parties to it under a mistake as to a
matter of fact”
A party cannot be allowed to avoid a contract merely on
the ground of his own mistake which may be due to his
own negligence or carelessness
However, there are exceptions

54. Mistake of Fact
Exceptions (Unilateral mistakes):
1. Mistake as to the identity of the person
contracted with
2. Mistake as to nature of the contract
3. Mistake as to quality of the promise

55. Quasi Contract
“Under certain circumstances, the law imposes,
certain rights & obligations similar to that
arises from a true contract, even though
there is no contract, express or implied,
between parties.”
Such contracts are termed as quasi- contracts
(Dr.Jenks)
 This is based on maxim that „no man must grow
rich out of another person‟s cost‟.
 It is based on equitable principal, „ that a person
shall not be allowed unjustly to enrich himself at the
expense of another‟

56. Kinds of Quasi Contracts
 Claim for necessaries supplied to a person incapable
of contracting on his account(S.68)
 Reimbursement of a person paying money due by
another in payment of which he is interested (S.69)
 Obligation of person enjoying benefit of a non-
gratuitous act (S.70)
 Rights and liabilities of the finder of lost
goods(S.71)
 Liability of persons to whom money is paid or things
delivered by mistake or coercion(S.72)

57. Distinction between Quasi &
General Contracts
 In General Contract obligation is created by the
consent of parties , whereas in quasi contract it is
imposed by law.
 As far as claims for damages – there is similarity
between because in case of breach of a quasi
contract (S.73) ensures same obligations as of
general contract
 The injured party is entitled to same compensation
on default

58. Legality of Object
 In a contract consideration and object have very little
difference. One affects the other.
 An agreement will not be enforceable if its object or
consideration is unlawful
According to (S.23) the consideration and the object
of an agreement are unlawful in following
cases;
1. If it is forbidden by law
2. If is of such a nature that if permitted, it would
defeat provisions of any law
3. If it is fraudulent
4. If it involves or implies injury to the person or
property of another
5. If the court regards it as immoral or opposed to
public policy

59. Performance of Contract
 A contract creates obligations
 „Performance of Contract‟ means carrying out
these obligations
 (S.37) parties to contract must either perform or
offer to perform their respective promises, unless
such performance is dispensed or excused under
provisions of the Act or any other law

60. Tender or Offer of Performance
 When a promisor offers performance of his
obligation at the proper time & place, it is known as
tender
 (S.38) If valid tender is made & is not accepted by
the promisee, the promisor shall not be responsible
for non-performance (nor shall he loose his rights
under the contract)

61. Conditions for a Valid Tender
1. Must be unconditional
2. Must be made at proper time & place, where
promisee has reasonable opportunity of
ascertaining that the promisor is able & willing
there and then to do the whole of his promise
3. The promisee must have reasonable opportunity
to see that the thing offered is the thing
contracted for

62. Persons entitled to demand
performance
1. Promisee
2. Legal Representative
3. Joint Promisee
4. Third Party

63. Persons bound to perform
1. By the Parties (S.37)
2. Promisor (S.40)
3. Representatives (S.37)
4. Agent (S.40)
5. Third Party (S.41)
Rule: The personal cause of action dies with person
concerned

64. Contracts which Need not be
Performed
1. If the parties mutually agree to substitute the
original contract by a new contract or rescind or
alter it (S.62)
2. If promisee dispenses with or remits wholly or
partly or extends the time or accepts any
satisfaction for it (S.63)
3. If the person at whose option the contract is
voidable, rescinds it (S.64)
4. If promisee neglects or refuses to afford promisor
reasonablefacility for performance (S.67)

65. Termination of Contract
Termination is the discharge of contractual relationship
between parties
Modes of Termination of Contract:
1. By Performance or Tender
2. By Mutual consent
3. Subsequent Impossibility of Performance
4. By Operation of Law
5. By lapse of Time
6. By Breach of Contract

66. Termination of Contract
1. By Performance or Tender
Where parties have fulfilled whatever contemplated –
contract ends
Tender: Tender has the same effect of as
performance. If promisor tenders performance of
his promise but the other party refuses to
accept, the promisor stands discharged of his
obligation

67. Termination of Contract
2. By Mutual consent:
i) Novation ( Substitution)
ii) Rescind (Cancel)
iii) Alteration
iv) Remit (Lesser fulfillment)
v) Waiver (Relinquish)
vi) Merger (discharge by a inferior right to superior right)

68. Termination of Contract
3. Subsequent Impossibility:
Inherent – void ab-initio
Void due to subsequent impossibility (Doctrine of
frustration)
i) Destruction of subject matter of contract (for no fault of
promisor)
ii) By death or disablement of the parties (personal causation)
iii) By subsequent illegality
iv) By declaration of war
v) Non-existence of particular state of things
(Exceptions where impossibility does not render contract as void:
difficulty-expensive, commercial loss, failure of third person,
strike-lockout-civil disturbance, failure of an object)

69. Termination of Contract
4. By Operation of Law:
i) By death
ii) By insolvency
iii) By merger
iv) By the unauthorised alteration of terms

70. Termination of Contract
5. By lapse of Time:
 Contracts must be performed within the period of
limitation (Limitation Act)
 The Limitation Act prescribes different limitation
period for different kinds of contract
 If contract is not performed & the party aggrieved
does not enforce his rights within limitation period, he
is debarred from enforcing the contract
 After expiry period court will not enforce contract, thus
contract gets discharged

71. Termination of Contract
5. By Breach of Contract:
Refusal of performance is a breach. When one
party refuses to perform, other party is
discharged from its liability
i) Anticipatory breach- breach before the due date of
actual performance by refusal to perform or does an
act which makes the performance impossible
Consequences of anticipatory breach
a) Rescind & sue for damages at once
b) Treat contract as operative & wait for time of performance & hold
party liable for non-performance
„anticipatory breach‟ does not by itself become discharge of
contract. Discharge becomes effective on party aggrieved
elects to rescind the contract

72. Termination of Contract
ii) Actual breach –
a) at the time when performance is due
b) During the course of performance
When promisor offers to perform
subsequently, whether it should be accepted or
refused by the promisee & sue for breach would
depend on whether
time was an essence of the contract
If time is an essence of the contract is voidable at the
option of the promisee
In case time is not essence of contract, it is not
voidable, the promisee is entitled to compensation for
breach

73. Remedies for Breach of Contract
The relief available are:
i) Rescission
ii) Damages for loss sustained
iii) Decree for Specific Performance
iv) Injunction
v) Suit on „Quantum Meruit‟

74. Remedies for Breach of Contract
i) Rescission
 Aggrieved party may sue to treat contract as rescinded
 Aggrieved party is freed from all liabilities under the contract
 Aggrieved party is entitled to compensation(S.75) for loss
sustained on breach of contract
ii) Damages
a. Ordinary
b. Special
c. Vindictive /punitive/exemplary
d. nominal

75. Remedies for Breach of Contract
iii) Specific Performance:
Where damages is not a adequate remedy, court may
direct the party to breach to carry out his promise
S.P not granted- a) Monetary compensation is adequate, b) Contract
of Personal nature – to marry, c) Contract beyond objects laid in
Mem. of Association
iv) Injunction:
A party to breach of negative terms of contract (party does something
which he is not supposed to do), Court may prohibit him from
doing so, through an order known as injunction

76. Remedies for Breach of Contract
v) Suit on „Quantum Meruit‟:
The phrase means „as much as is merited (earned)‟
Rule- A party which has not performed its promise to its entirety,
cannot claim performance from the other
However, there is an exception to this rule on the basis of „Quantum
Meruit‟
Right to claim/sue on „Quantum Meruit‟ arises where a contract
partly performed has been discharged by the breach of the other
party