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1. DISCHARGE BY PERFORMANCE
Under a contract each party is bound to
perform his part of the obligation. After the
parties have made due performance of the
contract, their liability under the contract
comes to an end. In such a case the
contract is said to be discharged by
performance.
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Illustration
A, a singer, enters into a contract with B, the
manager of a theatre, to sing at his theatre two
nights in every week during the next two months,
and B engages to pay her at the rate of 100
rupees for each night. On the sixth night A
wilfully absents herself. With the assent of B, A
sings on the seventh night. B has signified his
acquiescence in the continuance of the contract,
and cannot now put an end to it, but is entitled to
compensation for the damage sustained by him
through As failure to sing on the sixth night
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The case of Avery Vs. Bowden (1855) illustrates the point where
the promisee elects to keep the contract alive, and the promisor in
spite of his earlier repudiation of the contract is discharged from
liability because of supervening circumstances before the date of
the performance arrives. In this case, A chartered Bs ship at
Odessa, a Russian port, and undertook to load the ship with cargo
within 45 days. Before this period had elapsed, A failed to supply
the cargo and declined to supply the same. The master of the ship
continued to insist that the cargo be supplied but A continued to
refuse to load. Before the period of 45 days was over, Crimean War
broke out between England and Russia, whereby it became illegal
to load cargo at a hostile port. The question in this case was,
whether by declaration of the war A had been discharged from
liability to load the cargo. In this case, on As refusal to load the
cargo B could have rescinded the contract and brought an action
against A, but B instead, by insisting that the cargo be supplied,
kept the contract alive. The contact continued to be alive and
subsisting for the benefit of both A and B. By the declaration of war,
the performance of the contract having become unlawful, it was held
that A had been discharged from his duty to supply the cargo, and,
therefore, A could not be made liable for non-performance of the
contract.
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3. DISCHARGE
BY IMPOSSIBILITY OF
PERFORMANCE
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1. INITIAL IMPOSSIBILITY
An agreement to do an act impossible in itself is
void. The object of making any contract is that
the parties to it would perform their respective
promises. If a contract is impossible of being
performed., the parties to it will never be able to
fulfil their object, and hence such an agreement
is void. For example, A agrees with B to
discover treasure by magic. The performance of
the agreement being impossible, the agreement
is void. Similarly, an agreement to bring a dead
man to life is also void.
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2. SUBSEQUENT IMPOSSIBILITY
The performance of the contract may be
possible when the contract is entered into but
because of some event, which the promisor
could not prevent, the performance may become
impossible or unlawful. Section 56 makes the
following provision regarding the validity of such
contracts :
A contract to do an act which after the contract
is made, becomes impossible, or by reason of
some event which the promisor could not
prevent, unlawful, becomes void when the act,
becomes impossible or unlawful.
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party has
performed a part of his obligation under the contract
before the breach of contract has occurred, he is
entitled to recover the value of what he has done, under
this remedy.
DAMAGES
Section 73 makes the following provisions regarding the
might of the injured party to recover compensation for the
loss or damage which is caused to him by the breach of
contract.
Section 73. Compensation for loss or damage caused
by breach of contract. When a contract has been
broken, the party who suffers by such breach is entitled to
receive, from the party who has broken the contract,
compensation for any loss or damage caused to him
thereby, which naturally arose in the usual course of
things from such breach, or which the parties knew, when
they made contract, to be likely to result from the breach
of it.
Such compensation is not to be given for any remote and
indirect loss or damage sustained by reason of the
breach.
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DAMAGES
Compensation for failure to discharge obligation
resembling those created by contract. When an
obligation resembling those created by contract has
been incurred and has not been discharged, any person
injured by failure to discharge it is entitled to receive the
same compensation from the party in default, as if such
person has contracted to discharge it and had broken his
contract.
Explanation :- In estimating the loss or damage arising
from a breach of contract, the means which existed of
remedying the inconvenience caused by nonperformance of the contract must be taken into account.
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DAMAGES
The section has been explained with the help of the following
illustrations :
a) A contracts to sell and deliver 50 maunds of saltpetre to B , at
certain price to be paid on delivery. A breaks his promise, b is
entitled to receive from A, by way of compensation, the sum, if
any, by which the contract price falls short of the price for which B
might have obtained 50 maunds of saltpetre of like quality at the
time when the saltpetre ought to have been delivered.
b) A contracts to let his ship to B for a year from the first of January,
for a certain price. Freights rise, and on the first of January, the hire
obtainable for the ship is higher than the contract price. A breaks
his promise. He must pay to B, by way of compensation, a sum
equal to the difference between the contract price and the price for
which B could hire a similar ship for a year on and from first
January.
c) A contracts to repair Bs house in a certain manner, receives
payments in advance. A repairs the house but not according to
contract. B is entitled to recover from A the cost of making the
repairs conform to the contract.
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Nominal Damages
Where the injured or aggrieved party
suffers no loss or very negligible loss the
Court may still award him or her nominal
damages in order to recognise his or her
right. Thus, such damages merely
acknowledge that the aggrieved or
injured party has proved his case and
won it.
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Exemplary Damages
Liquidated Damages
Exemplary Damages
They are intended to make an example of the
defendant, they are punitive and not intended to
compensate the plaintiff for any loss, but rather to
punish the defendant.
Liquidated Damages
Damages are said to be liquidated when they have
been agreed and fixed by the parties. It is the sum
which the parties have agreed by contract as payable
on default on one of them. If the compensation to be
paid on the breach of contract is the genuine
pre-estimate of the prospective damages, it is known
as liquidated damages.
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QUANTUM MERUIT
Ordinarily if a person having agreed to do some work or
render some
service has done only a part of what he was required to
do, he cannot claim anything for what he has done. When
a person agrees to complete some work for a lump sum
non-completion of the work does not entitle him to any
remuneration even for the part of the work done. But the
law recognises an important exception to this rule by way
of an action for Quantum Meruit Under this section if A
and B have entered into a contract, and A, who has
already performed a part of the contract, is then prevented
by B from performing the rest of his obligation under the
contract, A can recover from B reasonable remuneration
for what ever he has already done.
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QUANTUM MERUIT
It may be noted that this action is not an action for
compensation for breach of contract by the other side. It
is an action which is alternative to an action for the
breach of contract. This action in essence is one of
restitution, putting the party injured by the breach of
contract in a position in which he would have been had
the not been entered into. It merely entitles the injured
party to be compensated for whatever work he may have
already done, or whatever expense he may have
incurred. In the words of Alderson, B,
Where one party has absolutely refused to perform, or
has rendered himself incapable of performing, his part of
the contract, he puts it in the power of the other party
either to sue for the breach of it or to rescind the contract
and sue on a quantum meruit for the work actually
done.
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QUANTUM MERUIT
The essentials of an action of quantum meruit are as
follows :
1. One of the parties makes a breach of contract, or
QUANTUM MERUIT
In De Bernardy
Vs. Harding, (1853) the
defendant, who was to erect and le seats to view
the funeral of the Duke of Wellington, appointed
the plaintiff as his agent to advertise and sell
tickets for the seats. The plaintiff was to be paid
commission on the tickets sold by him. The
plaintiff incurred some expense in advertising for
the tickets but before any tickets were actually
sold by him his authority to sell tickets was
wrongfully revoked by the defendant. It was held
that the plaintiff was entitled to recover the
expenses already incurred by him under an
action for quantum meruit.
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