Journey From Performance To Breach In Indian Contract

Publication Information

Journal Title: Indian Politics & Law Review
Author(s): Pragyanshu Gautam
Published On: 03/02/2021
Volume: 6
First Page: 55
Last Page: 65
ISSN: 2581-7086
Publisher: The Law Brigade Publisher

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Pragyanshu Gautam, Journey From Performance To Breach In Indian Contract, Volume 6, Indian Politics & Law Review, 55-65, Published on 03/02/2021, Available at https://iplr.thelawbrigade.com/article/journey-from-performance-to-breach-in-indian-contract/

Abstract

“The only chains you should wear in your life are the chains of commitment”

As the quote, itself states the importance of the commitment towards the performance of contract irrespective of the exceptions provided in the Indian Contract Act, 1872[i]. A simple thing is that if you can’t do commitment then don’t plan and if you do plan then do commitment. This applies in Indian Contract Act, 1872 (taken from English Common Law[ii]) which includes in chapter-IV sections for the performance of a contract: sections 40, 41, 43, 44, 42, 45, 46-50, 51-54, 55-58, 62, 63 and 67, again chapter-IV section 39, for anticipatory breach of a contract followed with section 73 for actual breach. Due to the non-performance of a contract, the consequences (compensation of damages) extend to Chapter-VI section 73 (damages for breach) and section 75 (rescinding[iii] of a contract for compensation) :

  1. Chapter- IV: OF THE PERFORMANCE OF CONTRACTS, from (Contracts which must be performed)[iv] Specifically, the obligation of parties to contract (section- 37)  to (Contracts which need not be performed)[v] which ends with Effect of neglect of promisee to afford promisor reasonable facilities for performance (section- 67).
  2. Chapter-IV Section-39 introduces and gives the meaning of anticipatory breach[vi] and their effect upon the right to recover the damage.
  3. Chapter-VI extends to the inconvenience caused by non-performance of a contract and remedies given for the same in section-73 to 75[vii] (includes actual breach[viii] in 73[ix] which is unliquidated damages[x] and for liquidated damages[xi] is in 74 and in section 75 is compensation through rescinding of a contract.

[i] It is the law relating to the contracts in India which have been passed by the Legislature and received its assent on 25th April 1872 (Act 9 of 1872) and enforced on 1st September 1872.

[ii] It is the unwritten common law that comprises civil and criminal law, each having its own branch of court and procedure and is applicable in England.

[iii] To take back a contract from performing.

[iv]in THE INDIAN CONTRACT ACT, 1872 – BARE ACT (2020).

[v] Id at 29.

[vi] Avatar Singh, in CONTRACT AND SPECIFIC RELIEF (2020).

[vii] Supra note 3, at 34.

[viii] It is a breach during the scheduled performance of the contract either it is due or ongoing.

[ix] Janhavi Arakeri, Liquidated and Unliquidated Damages  (ipleaders Intelligent Legal Solutions 27th May 2019).

[x]  Damages that are claimed on the actual losses and which is unforeseeable or not known. It is after the performance of a contract.

[xi] According to the Black’s Law Dictionary definition ‘Liquidated damages’ as, “An amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches the contract; also if the parties to a contract have agreed on Liquidated Damages, the sum fixed is the measure of damages for a breach, whether it exceeds or falls short of the actual damages.” In short, it is foreseeable and for which a contract is to pay for a certain amount on the breach. It is the prior performance of a contract.

Keywords: Indian Contracts Act, Performance of Contract, Breach of Contract

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