UGC NET Study Notes on Breach of Contract and Remedies

What is a Breach of contract?

A. Meaning

• In simple words, it can be said that breach of the contract is merely the non-performance of the contract by either party to the contract.
• For Example, A enters into the contract with B to sell XYZ product on say 1 march and either A or B refuses to perform the contract, in such a case, it is called a breach of contract.

B. Discharge of contract V. Breach of contract

• Discharge of a contract is one in which the contract comes to end as per the terms and conditions or by a mutual decision.
• On the other hand, breach of contract is the fault of anyone of the parties to the contract.

C. Kinds of breach of contract

• Actual breach of contract AND Anticipatory breach of contract.
• Under actual breach of a contract, either of the party refuses to perform the contract either on the due date of performance of the contract or during the performance of the contract.
• Like in the above example, if A refuses to sell the product to B on 1st march or if in the above case, A contracted to sell the product in instalments and after supplying some products, refuses to supply further products then, in both the conditions it is said that there is an actual breach of the contract.
• Under anticipatory breach of contract, either of the parties to the contract refuses the performance of their part before the due date.
• Like in the above example if A refuses to sell the goods to B before 1st march then it is called an anticipatory breach of contract.

Note: An anticipatory breach can be converted into an actual breach if the party that is being injured in the contract decides not to rescind the contract immediately rather to wait till due date. If the anticipatory breach is continued till the due date it becomes an actual breach of contract.

Types of Breach of Contract

• A minor breach of contract: Under which non-essential conditions of the contract is/are not performed by either party.
• A major breach of contract: Under which the whole of the contract is not performed by either party.

Remedies for breach of contract

1. Suit for damages (Ordinary, Special, Exemplary, Nominal)
2. Suit for specific performance
3. Suit for injunction
4. Suit for Quantum Meruit

1. Suit for Damages

When one party refuses to perform its obligation under the contract, the aggrieved party can claim damages from either party.

Ordinary/General Damages:

• Such damages are the compensation for the loss that occurred to the aggrieved party.
• Such damages are the difference between the contract price and the market price.
• Like in the above example, if A contracted to sell XYZ product to B @ Rs 100 for each unit and afterwards breached the contract, then B is entitled to claim Rs. 20 each unit given the market price at the time of breach was Rs 120 each unit.

Special Damages:

• These are those damages which have been occurred due to some special conditions in the contract.
• For example, if A contracted to sell B, 400 units @ 100 each and in the same contract B demanded the supply before 1st March as B needed to sell it to C for them @ Rs. 300 per unit on 1st March. Now if A refuses to perform the contract, then B is untitled to claim damages @ Rs. 200 for each unit for losses.

Exemplary/Vindictive Damages:

• These types of damages are distinct from other damages, as other damages are imposed on the party who made the breach of contract in order to compensate the aggrieved party.
• These are those damages that are awarded by the court as punishment because in some cases, the breach not only results in a monetary loss rather it gives an adverse effect to the mental position of the aggrieved party.
• Such damages are commonly awarded in either marriage conflicts or in dishonour of cheques.
• These kinds of damages affect the status of the aggrieved party in society.

Nominal damages:

• These are those damages that are granted by the court in those cases where the loss to the aggrieved party is very less in value.
• These kinds of damages are due to such problems where the loss can’t be determined or proved by the aggrieved party.
• Such damages are common when due to negligence of the plaintiff, loss occurs and there was no actual fault of the defendant.

2. Suit for Specific Performance

• The court may direct for the specific performance of the contract when damages are not the adequate relief that can be granted to the plaintiff. Under this, the court directs the defendant to carry out the performance of the contract as per the terms and conditions.
• Generally, such orders are granted by the court in property and marriage cases where the court orders the party to complete the contract.

3. Suit for Injunction

• It is just opposite to the suit for specific performance. In a suit for specific performance, the court grants the order to perform the contract whereas, under the injunction, the court restrain from the performance of the contract.
• Such order by the court is totally discretionary in terms of times period i.e. it can be granted by the court either for some specific period or for an indefinite period of time.
• If the party to whom a suit for an injunction has been granted violates such a suit, it will be considered as contempt of court.
• For example, If A contracted B to sell XYZ product to B for a period of 1 year and also mentioned that B is restrained from purchasing such product during this time from anyone close. If B purchases the XYZ product during that period of one year from C, then the court can pass an order to B restraining the purchase of such product from C.

4. Suit for quantum meruit:

• In some cases, where it is not possible to determine the damages by the parties to the contract, then the court will award what is reasonable under the circumstances to provide relief to the aggrieved party.

Best Books For UGC NET Commerce

Below are the best Books for UGC NET Commerce. Candidates can refer to these books for UGC NET Preparations. 

Topic Name	Relevant Book
Micro Economics	Graduation Textbook Micro Economics by Dr Deepshree
Finance	Graduation level Textbook and Internet/ Wikipedia
Financial Management	Graduation level Textbook by I.M. Pandey
Business Statistics	Post-Graduation level Textbook “Business Statistics” by Dr J.K. Thakur
Research Methods	Graduation level Textbook by C.R. Kothari

UGC NET Commerce Preparation Tips

1. First of all, candidates who are planning to prepare for UGC NET 2022 Exam should have a thorough knowledge of the UGC NET Commerce Syllabus. 
2. After analysing the syllabus, the next thing you need is the right study material for the preparations to begin. Candidates can refer to the below table for UGC NET Commerce Books.
3. Another useful preparation tip is to solve UGC NET Previous Year Papers. Solve as much as you can as they will prepare you for the type of questions in the exam. 
4. It is also very important to keep giving UGC NET Mock test. These will prepare you for the actual exam environment and you can practise new questions through them. 

Mock tests for UGC NET Exam

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Team, BYJU’S Exam Prep.

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