Chapter 2 : Law of Contract
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REMEDIES OF CONTRACT Remedies is the method by which an injured party enforces a right or corrects a loss due to the other party has breach a contract. The remedies available to the injured party will depend on the nature of the breach and the results will differ between the parties. The usual remedy for a breach of contract is an award of damages, which is a common law remedy. However, if a monetary remedy is not satisfactory, the court may exercise its discretion and order any one of several equitable remedies. The remedies available for breach of contract are: o Damages o Rescission of contract o Restitution o Specific performance o Injunction o Quantum Meruit o Anton Piller Order
Damages
Damages in contract law can be defined as a sum of money paid to the innocent party in compensation for a breach of contract. The main purpose of damages is to enable the innocent party to receive monetary compensation from the party responsible for the breach of contract. Section 74 of the Contracts Act 1950 provides that “damages are granted to a party as compensation for the damage, loss injury he has suffered through a breach of contract”. The party may recover damages as follow: i. Expenses incurred as a result of the breach, ii. Loss of profits arising as a result of the breach; and iii. Difference between the price of goods as contracted for and the actual price the goods were sold as a result of the breach.
Hadley v. Baxendale Facts: Plaintiff operated a mill, which they were forced to shut down when their steam engine broke. Then, plaintiff makes a contract with defendant to replace the broken engine. Due to defendant’s neglect, the delivery of the new engine was delayed, and plaintiff had to suffer losses. Held: The court held that the defendant is liable for damages suffered by plaintiff due to loss of profits.
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