When there is a breach of contract by one party, the other party may rescind the contract and need not perform his part of the obligations under the contract and may sit quietly at home if he decides not to take any legal action against the guilty party. But in case the aggrieved party intends to sue the guilty party for damages for breach of contract, he has to file a suit for rescission of the contract. When the court grants rescission, the aggrieved party is freed from all his obligations under the contract; and becomes entitled to compensation for any damage which he has sustained through the non-fulfillment of the contract (Sec. 75). .
Illustration A contracts to supply 100 kg of tea leaves for Rs 8,000 to B on 15 April. If A does not supply the tea leaves on the appointed day, B need not pay the price. B may treat the contract as rescinded and may sit quietly at home. B may also file a suit for rescission and claim damages.
Thus, applying to the court for ‘rescission of the contract’ is necessary for claiming damages for breach or for availing any other remedy. In prac-tice a ‘suit for rescission’ is accompanied by a ‘suit for damages,’ etc., in the same plaint.
It is worth noting that in certain cases a suit for ‘rescission of the contract’ may be filed even when no damages are to be claimed, for example, in case of pledge of movable goods, say gold ornaments, if the pledger does not pay as per agreement, the pledgee may file a suit for rescission of the contract (of course within the period of limitation which is 30 years in this case), in order to free himself from his obligation to return the ornaments on payment and to become entitled to sell the ornaments in order to realise his debt.
Suit for Damages
Damages are monetary compensation allowed to the injured party for the loss suffered by him as a result of the breach of contract. The fundamental principle underlying damages is not punishment but compensation. By awarding damages the court aims to put the injured party into the position in which he would have been had there been performance and not breach, and not to punish the defaulter party. As a general rule, “compensation must be commensurate with the injury or loss sustained, arising naturally from the breach.” “If actual loss is not proved, no damages will be awarded.
Assessment of damages. We will now consider the extent to which a plaintiff is entitled to demand damages for breach of contract. The rules in this regard have been laid down by Section 73. Accordingly, an injured party is entitled to receive from the defaulter party:
(a) Such damages which naturally arose in the usual course of things from such breach. No compensation is to be given generally for any remote or indirect loss sustained by reason of the breach (Ordinary Damages).
(b) Such damages which the parties knew, when they entered into the contract, as likely to result from the breach (Special Damages).
(c) In estimating the loss or damage caused to a party by breach, the means which existed of remedying the inconvenience caused by the breach must also be taken into account (Explanation to Sec.73). (Duty to mitigate damage suffered.)
With a view to making the study of the quantum of damages easily comprehensible, the above rules, as enunciated in Section 73 may now be considered in some more details under appropriate heads.
Illustration A contracts to supply 100 kg of tea leaves for Rs 8,000 to B on 15 April. If A does not supply the tea leaves on the appointed day, B need not pay the price. B may treat the contract as rescinded and may sit quietly at home. B may also file a suit for rescission and claim damages.
Thus, applying to the court for ‘rescission of the contract’ is necessary for claiming damages for breach or for availing any other remedy. In prac-tice a ‘suit for rescission’ is accompanied by a ‘suit for damages,’ etc., in the same plaint.
It is worth noting that in certain cases a suit for ‘rescission of the contract’ may be filed even when no damages are to be claimed, for example, in case of pledge of movable goods, say gold ornaments, if the pledger does not pay as per agreement, the pledgee may file a suit for rescission of the contract (of course within the period of limitation which is 30 years in this case), in order to free himself from his obligation to return the ornaments on payment and to become entitled to sell the ornaments in order to realise his debt.
Suit for Damages
Damages are monetary compensation allowed to the injured party for the loss suffered by him as a result of the breach of contract. The fundamental principle underlying damages is not punishment but compensation. By awarding damages the court aims to put the injured party into the position in which he would have been had there been performance and not breach, and not to punish the defaulter party. As a general rule, “compensation must be commensurate with the injury or loss sustained, arising naturally from the breach.” “If actual loss is not proved, no damages will be awarded.
Assessment of damages. We will now consider the extent to which a plaintiff is entitled to demand damages for breach of contract. The rules in this regard have been laid down by Section 73. Accordingly, an injured party is entitled to receive from the defaulter party:
(a) Such damages which naturally arose in the usual course of things from such breach. No compensation is to be given generally for any remote or indirect loss sustained by reason of the breach (Ordinary Damages).
(b) Such damages which the parties knew, when they entered into the contract, as likely to result from the breach (Special Damages).
(c) In estimating the loss or damage caused to a party by breach, the means which existed of remedying the inconvenience caused by the breach must also be taken into account (Explanation to Sec.73). (Duty to mitigate damage suffered.)
With a view to making the study of the quantum of damages easily comprehensible, the above rules, as enunciated in Section 73 may now be considered in some more details under appropriate heads.
Sue for damages in Rescission of the Contract
![Sue for damages in Rescission of the Contract]()
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