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 Effect of Anticipatory Breach

In case of contract, the aggrieved party has the following remedies.


The Promise May Put An End To The Contract:

The aggrieved party may treat anticipatory breach as actual breach of contract, and may rescind the contract. This will result in:


(a) The promise is executed from performing his promise.

(b) The promise can sue promisor for breach of contract immediately without waiting for the due date of performance.

(c) The amount of damages shall be equal to the difference between the price prevailing as on the date of refused to perform and the contract price.

The Promise May Decide To Keep The Contract Alive Till The Date Of Performance: This Will Result In

(a) The promisor may elect to perform his promisor on the due date and in that case, the promise will be bound to accept the performance.

(b) If during the period the contract remains open, some event happens which discharge the contract, the promisor will be discharged from his liability and the contract will become void.

(c) The amount of damages in these damages in this case will be equal to difference price prevailing on the date of performance and the contract price.

We shall now explain this difference in the amount of damages by means of an illustration, X agrees to sell to Y a certain quantity of say, wheat at Rs.100/- per quintal to be delivered, say, on the 3rd March. On 2nd February, X gives notice expressing his unwillingness to sell wheat; and the price of wheat on the date is Rs.110/- per quintal. Y repudiates the contract fourth with (which he is entitled to do at his option), he would be able to recover damages @ Rs.10/-per quintal, being the difference between market price on the 2nd February and the contract price.

If instead of taking the action fourth with, he keeps the contract alive till the 3rd March and in the mean time, time, the price increases to Rs.125/- per quintal on the date. Y would be able or recover damages @ 25/- per quintal. If on the other hand, during the intervening period between 2nd February and 3rd March, private sale of wheat is prohibited by the government, the contract become void, and Y would not be able to recover and damages what ever. Thus you observe that if the promise keeps the contract alive, he does so not only for his own benefit but also for the benefit of the promisor.

Actual Breach of Contract

Actual breach of contract may take place in any of the two ways:


  • Breach at the time when the performance of contract is due.
  • Breach of contract during the performance of the contract.

Actual Breach of Contract When The Performance Is Due

“When a party to a contract promises to do certain things at or before the specified date and fails to do it at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promise, if the intention of the parties was that time should be of essence of the contract.

However, where time is not of essence, the contract does not become voidable but the promise is entitled to compensation from the promisor for any loss suffered by him due to such failure.

Actual Breach Of Contract During The Performance Of The Contract

When during the performance of the contract one party fails or refuses to perform his obligation under the contract, the aggrieved party has the right to sue him for breach of contract.
Remedies for Breach Of Contract

The various remedies available to an aggrieved party are as follows:


1. Rescission of contract:

In case of breach of a contract, the aggrieved party may put an and to the contract. In such a case, the aggrieved party is discharged from all the obligations under the contract and is entitled to claim compensation for the damages which he has sustained due to non-performance of the contract.


2. Suit for damages:

The aggrieved party can claim following type of damages from the defaulting party as compensation for loss or damage.


Ordinary damages: Ordinary damages are those which naturally arise in the usual course of things from such breach. The ordinary damage which can be claimed is the difference between the contract price and the market price at the date of the breach.

Special damages: where a party to a contract received a notice of special circumstances affecting the contract, he will be liable not only for the ordinary damages arising naturally and directly from the breach but also for the special damages.

Exemplary, Punitive or Vindictive damages: These damages are awarded only in two cases:

  • For breach of promises to marry
  • Wrongful dishonor of a cheque by a banker

In the breach of promise to marry, exemplary damages may be awarded to the other party taking into consideration. The injury caused to his or her feelings. The amount of damages recoverable for wrongful dishonor of cheque depends upon the loss of credit and reputation suffered on that account.


Nominal damages 

Nominal damages are awarded where the plaintiff has proved that there has been a breach of contract but he has not in fact suffered any real damage. It is awarded just to establish the right of decree for the breach of contract.


Damages for Deterioration Caused By Delay

In the case of deterioration caused to goods by delay, damages can be recovered from carrier even without notice. It includes physical damages to the goods as well as loss of special opportunity for sale.


Damages for Inconvenience and Discomfort

If a party has suffered physical inconvenience and discomfort due to breach of contract, the party can recover the damages.

Liquidated Damages and Penalty

When the parties to a contract at the time of formation of contract, specify a sum which will become payable by the party responsible for breach, such specified sum is called liquidated damages and penalty. The courts in India allow only reasonable compensation not exceeding the specified sum.

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