Contract Law · Remedies and Quasi-Contracts

Breach of Contract and Remedies

Choose the appropriate response to contractual breach, including termination, damages, specific relief, restitution and reasonable mitigation.

5 min readReviewed by Advocate Aditya Sharma
Sections 39 and 55Sections 73 to 75

In one line

A breach creates remedies, but the claimant must match the remedy to the seriousness, timing and proven consequences of non-performance.

After this note, you should be able to

  • Classify the breach before selecting a remedy.
  • Distinguish termination from a claim for damages.
  • Apply causation, remoteness and mitigation.

Remedy map

Not every breach justifies ending the contract, and no single remedy fits every claim.

Termination
A sufficiently serious refusal or failure may permit the innocent party to end future performance while preserving accrued rights.
Damages
Sections 73 and 74 provide monetary compensation for legally recoverable loss caused by breach.
Specific relief
Specific performance or injunction may be available under the Specific Relief Act when its statutory requirements are satisfied.
Restitution or quantum meruit
A party may seek restoration or reasonable value where retaining a benefit without payment would be unjust and the legal conditions are met.
Rescission compensation
Section 75 allows a party rightfully rescinding a contract to claim compensation for damage sustained through non-fulfilment.

Controls on a damages claim

A breach alone does not prove the amount claimed.

Causation
The loss must result from the breach.
Remoteness
Recover ordinary loss or special loss within the parties' contemplation, not remote consequences.
Mitigation
Reasonable steps to reduce avoidable loss are considered. The claimant need not take unreasonable risks.
Proof
The claimant should prove the loss and available market evidence where its amount can reasonably be established.

Work through the facts

Illustration

Facts

A supplier fails to deliver standard goods. The buyer can purchase identical goods immediately for Rs 20,000 more but waits six months while the market price triples.

Likely result

The buyer may recover loss naturally caused by breach, but the avoidable increase after a reasonable substitute purchase became available may be excluded.

What to learn

Mitigation does not erase breach. It controls compensation for loss that reasonable action could have avoided.

Cases with a purpose

Landmark judgments

Learn the rule and where to use it. A case name without its legal function adds very little to an answer.

Murlidhar Chiranjilal v. Harishchandra Dwarkadas

Further reading

AIR 1962 SC 366

Principle: Contract damages follow the ordinary course or the parties' contemplation, and the claimant must take reasonable steps to mitigate loss.

Use in an answer: Use it for remoteness, market-price damages and mitigation under Section 73.

Read primary judgment

Hochster v. De La Tour

Further reading

(1853) 2 E&B 678

Principle: A clear anticipatory repudiation may be accepted immediately, allowing the innocent party to sue without waiting for the performance date.

Use in an answer: Use it where the remedy is claimed before performance became due.

For a 10-mark answer

Answer structure

  1. Identify the obligation, due date and exact breach.
  2. Decide whether termination was legally justified.
  3. Select damages, specific relief, restitution or combined compatible relief.
  4. Apply causation, remoteness, mitigation and proof.

Common mistakes

  • Assuming every breach permits termination.
  • Claiming the contract price as damages without proving loss.
  • Treating mitigation as a duty to take unreasonable action.

Before you close the tab

Quick revision

  • Classify breach before choosing relief.
  • Termination ends future obligations, not every accrued right.
  • Damages are compensatory and controlled by Section 73.
  • Specific relief depends on a separate statutory framework.

Test yourself

  1. Does every breach justify termination?
  2. What losses are too remote?
  3. How does mitigation affect damages?

Short answers

Frequently asked questions

Can a claimant receive damages after terminating the contract?

Yes. Rightful termination can end future performance while preserving a claim for loss caused by the breach.

Must the innocent party prevent every possible loss?

No. The law expects reasonable mitigation, not extraordinary expense, risk or sacrifice.

Primary sources

This is an educational study note. Always read the bare provision and the full judgment before relying on a proposition in research or practice.