Contract 56 to 75
Contract act
Section 56.agrement to do impossible act ---an agreement to do an act impossible in itself is void .
Contract to do act afterwards becoming impossible or unlawful ---
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 become void when the act becomes impossible or unlawful.
Compensation for loss through non performance of act known to be impossible or unlawful ---
Where one person has promised to do something which he knew or with reasonable diligence might have known and which the promise did not know to be impossible or unlawful such promisor must make compensation to such promise for any loss which such promisee for any loss which such promisee sustains through the non performance of the promise.
Landmark judgement
Doctrine of frustration
Tailor versus coldwell
Facts ----Respondent had given his concert hall to organise a music concert for a fixed rent .but the hall was destroyed due to fire . plaintiff had filed a suit for breach of contract .
Decision ---in this situation performance of contract is not possible because matter of contract had been destroyed .so performance of contract had become impossible.
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Landmark decision no.2
Crel versus Henary
Facts ---the respondent had hired house of plaintiff for two days to enjoy coronation procession .the procession was about to pass from road nearest this house .but the procession had been postponed due to illness of king .and respondent had denied to give remaining rent . plaintiff had filed a suit for remaining rent .
Decision ---the plaintiff could not get remaining rent because main purpose of this contract had been frustrated .
Landmark judgement no.3
Howel versus coopland
Facts ----here respondent was a farmer and he used to grow potatoes in his field .he had contracted with plaintiff to sell potatoes .but the entire crops of potatoes had been destroyed due to some disease .the plaintiff had filed a suit for compensation .
Decision -----the plaintiff was not responsible in this case . because matter of contract had been destroyed due to natural disease .so respondent was not responsible.
Illustrations
a.A agrees with B to discover treasure by magic .the agreement is void .
b.A and B contracts to marry each other before the time fixed for the marriage A goes mad .the contract becomes void .
c.A contract to marry B .being already married to C and being forbidden by the law to which he is subject to practise polygamy .A must make compensation to B for the loss caused to her by the non performance of his promise.
d.A contracts to take in cargo for B at a foreign port .A 's Government afterwards declares war against the country in which the port is situated .the contract becomes void when war is declared
e.A contracts to act at a theatre for six months in consideration of a sum paid in advance by B .on several occasions A is too ill to act.the contract to act on those
Section 57.Reciprocal promise to do things legal and also other things illegal ---
Where persons reciprocally promise firstly to do certain things which are legal and secondly under specified circumstances to do certain other things which are illegal the first set of promises is a contract but the second is a void agreement.
Illustrations
A and B agrees that A shall sell B a house for 10,000/ rupees but that if B uses it as a gambling house he will pay A 50000 rupees for it
The first set of reciprocal promises namely to sell the house and to pay 10 000 rupees for it is a contract .
The second set is for an unlawful object namely and is a void agreement.
Section 58 .alternative promise one branch being illegal ----
In the case of an alternative promise one branch of which is legal and the other illegal the legal branch alone can be enforced.
Illustrations
A and B that A shall pay B ,1000 rupees for which B shall afterwards deliver to A either rice or smuggled opium .
This is a valid contract to deliver rice
A void agreement as to the opium.
Sec 59---- application of payment where debt to be discharged is indicated ----where a debtor owing to several distinct debts to one person makes a payment to him either with express intimation or under circumstances implying that the payment is to be applied to the discharge of some particular debt the payment ,if accepted must be applied accordingly
This principal had been laid down in "in ree cliton " in 1816.
ILLUSTRATIONS
A.A owes B among other debts 1000 rupees upon a promissory note
Which falls due on the first june
He owes B no other debt of that amount
On the first june A pays B 1000/ rupees .the payment is tobe applied to the discharge of the promissory note
B.A owes to B among other debts the sum of 567 rupees .B writes to A and demands payment of this sum .a sends to b 567 rupees .this payment is to be applied to the discharge of the debt of which B had demanded payment .
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Section 60 . application of payment where debt to be discharged is not indicated ----where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied ,the creditor may apply it at his discretion to any lawful debt actually due and payable to him from debtor whether its is or not barred by the law in force for the time being as to the limitation of suits .
Even debt is time barred
Even rate of interest is low
But debt is not disputed
Contract act
Sec 59---- application of payment where debt to be discharged is indicated ----where a debtor owing to several distinct debts to one person makes a payment to him either with express intimation or under circumstances implying that the payment is to be applied to the discharge of some particular debt the payment ,if accepted must be applied accordingly
This principal had been laid down in "in ree cliton " in 1816.
ILLUSTRATIONS
A.A owes B among other debts 1000 rupees upon a promissory note
Which falls due on the first june
He owes B no other debt of that amount
On the first june A pays B 1000/ rupees .the payment is tobe applied to the discharge of the promissory note
B.A owes to B among other debts the sum of 567 rupees .B writes to A and demands payment of this sum .a sends to b 567 rupees .this payment is to be applied to the discharge of the debt of which B had demanded payment .
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Section 60 . application of payment where debt to be discharged is not indicated ----where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied ,the creditor may apply it at his discretion to any lawful debt actually due and payable to him from debtor whether its is or not barred by the law in force for the time being as to the limitation of suits .
Even debt is time barred
Even rate of interest is low
But debt is not disputed
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Section 61.----application of payment where neither party appropriates -----where neither party makes any appropriation .the payment shall be applied in discharge of debt in order of time whether they are or are not barred by the law in force for the time being as to limitation of suits .if the debts are of equal standing the payment shall be applied in discharge of each proportionably .
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Contract which need not to be performed
Section 62 ---effect of novation ,rescission and alteration of contract ----if the parties to a contract agree to substitute a new contract for it or to rescind or alter it the original contract need not be performed .
This principal had been laid down in
scarf versus jardain
Essential elements of novation
A.parties must be same or different
Contract may be changed
Contract may be substituted
Lata construction versus Ramesh Chandra
Supreme court had laid down in this case that new contract must be complete sub situation of old contract there must be supercede clause to show cancellation of terms and conditions of previous condition
ILLUSTRATIONS
A.a owes money to b under a contract .it is agreed between a ,b and c .that b shall thenceforth accept c as his debtor instead of A .the old debt of a and b at an end .and a new debt from c to b has been contracted .
B .a owes b 10,000/ rupees .a enters into an agreement with b and gives b a mortgage of his estate for 5000/ rupees in place of debt of 10,000/ rupees .this is a new contract and extinguish the old .
C.a owes b 1000/ rupees under a contract b owes c 1000/ .b orders a to credit c with 1000 rupees in his books b does not assent to the arrangement .b still owes c 1000 rupees and no new contract has been entered into .
Important decision
1.section 62 is applicable proceedings after absolute novation of contract .
Board of trustees versus passkill terminal limited chennai
2.any basic change in done deeply in contract this is also known as novation of contract
Andheri bridge view housing cooperative society versus krishkant rao
3.when the liability of principal debtor is taken by any other person this is known as novation of contract
G.nambodripaad versus kerala finance cooperation
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Section 63 ----promise may dispense with or remit performance of promise ---every promisee may dispense with or remit ,
Wholly or in part the performance of the promise made to him or may extend the time for such performance or may accept instead of it any satisfaction which he thinks fit .
Illustrations
A.a promises to paint a picture for b .b afterwards forbid him to do so .a is no longer bound to perform the promise
B.a owes b 5000 rupees a pays to b and b accepts in satisfaction of the whole debt 2000 rupees paid at the time and place at which the 5000 rupees were payable
C.a owes b 5000/ rupees .c pays to b 1000 rupees and b accepts them in satisfaction of his claim on A .this payment is a discharge of the whole claim .
D.a owes b under a contract a sum of money the amount of which has not been ascertained a without ascertaining the amount gives to b and b in satisfaction thereof accepts the sum of 2000/ .this is a discharge of the whole debt whatever may be it's amount .
E .a owes b 2000/ and is also indebted to another creditors .a makes an arrangement with his creditors including b to pay them a composition of eight annas in the rupees upon their respective demands payment to b of 1000/ rupees is a discharge of b 's demands
Important point of section 63
1.give concession fully or partially
2.extend the time
3.accept any other fault
4.a party can waive his right
Land mark decision
Kapoor chand Ghodha versus meer nawab himayat
In this case 27 lakh was payable .creditor accepted 21 lakh rupees due to recommendation of a committee .after that he had filed a suit .according justice this condition comes under section 63 with section 43 of contract act .
Difference between 62 and 63
In 62 agreement and consideration is essential
In 63 there is no requirement of consideration and agreement
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Section 64 ----consequences of rescission of voidable contract ------
When a person at whose option a contract is voidable rescinds it the other party thereto need not perform any promise there in contained in which he is the promisor .the party rescinding a voidable contract shall if he have received any benefit thereunder from another party to such contract ,restore such benefit .so far as may be ,to the person whom it was recieved .
Illustrations
A.A sells his goods to B at high rate under coercion .B recieve the goods .later he proved that this good he had been sold under coercion. Till then he did not give money . He had to return that good .he cannot retain that good in any case.section 64 .
Examples
A is Don who threatened at gun point B to buy his house at 5 lakh .the real price is 60 lakh .B entered into contract due to this threat .
Case A ---if A has not given money to B .then A is not bound to perform this contract
Case B if B has received money then he had to return 5 lakh rupees to him
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Section 65 -----obligation of person who has received advantage under void agreement or contract that becomes void -------
When an agreement is discovered to be void or when a contract become the void ,any person who has received any advantage such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it .
Example
1.A wants to sell his horse at 10000/.so he had paid 10000/ to A instead of horse.but at the time of agreement horse has died .but in this situation A will have to return 10000/ to A.this contract was valid but after that it become void .
2. A gave 2 lakh rupees to B to kill c . but B did not kill c .in this situation A cannot recover 2 lakh rupees because this agreement is void ab initio .
Illustrations
A.a pays b 1000/ in consideration of B 's promising to marry c .a daughter c is dead at the time of the promise .the agreement is void but b must repay A the 1000/
B.a contract with b to deliver him 250 maunds of rice before the first of may .a delivers 130 maunds only before that day and none after .b retains the 130 maunds after the first of may he is bound to pay a for them
C.A ,a singer contracts with B the manager of a theatre to sing at his theatre for two night in every week during the next two months and B engages to pay her a hundred rupees for each night performance.on the sixth night A wilfully absent herself from thez theatre B in consequence rescinds the contract .B must pay A for the five nights on which she had sung .
D.a contract to sing for b at a contract for 1000 rupees which are paid in advance .A is too ill to sing A is not bound to make compensation to b for loss of the profit which would have made if a had been able to sing .but must refund to b the 1000/ rupees paid in advance.
66.mode of communicating or revoking rescission of voidable contract -----
The recession of voidable contract may be communicated or revoked in the same manner and subject to same rules as apply to the communication or revocation of proposal
Section 67 -----Effect of neglect of promise to afford promisor reasonable facilities for performance ----
If any promise neglects or refuses to afford the promisor reasonable facilities for performance of his promise
The promisor is excused by such neglect or refusal as to any non performance caused thereby .
Illustrations
A contract with B to repair B's house .b neglects or refuses to point out to A the place in which his house requires repair .
A is excused for the non performance of the contract.if it is caused by such neglect or refusal
Resembling those created by contract
Section 68
Claim for necessaries supplied to person incapable of contracting or on his account
-----if a person incapable of entering into a contract or anyone whom is legally bound to support ,
Is supplied by another person with necessaries suited to his condition in life
The person who has furnished such supplies is entitled to be reimbursed from the property of such in capable person .
Such type of contract is known as
Quasi contract ,implied contract and constructive contract
1.The act which has not not the strict form of a contract ,but has the effect of it an implied contract .
2.This is exception of this rule
That contract which had been done with a minor that contract is absolutely void
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Section 69 ------reimbursement of person paying money due by another in payment of which he is interested......
A person who is interested in the payment of money which is another is bound by law to pay and who therefore pays it is entitled to be reimbursement by other .
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Exall versus partridge
Plaintiff had left his carriage at defendant house . defendant 's landlord had taken this carriage to settle his rent .plaintiff had paid rent and taken his carriage .the court held that plaintiff can reimburse his money from defendant .
Example 2
A is tenant B .he has pais house tax instead of A .he has full right to reimburse this money under section 69
Illustration
B holds land in Between Bengal on a lease granted by A .the zamindar .the revenue payable by A to the Government being arrear ,his land is advertised for sale by government .under the revenue law ,
The consequences of such sale will be annulment of B's lease .B to prevent the sale and the consequent annulment of his own lease pays to the Government the sum due from A .A is bound to make good to B the amount so paid
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Section 70.obligation of person enjoying benefit of non gratuitous act ----where a person lawfully does anything for another person or delivers anything to him ,not intending to do so gratuitously and such other person enjoys the benefit there of the latter is bound to make compensation to former in respect of or to restore the things so done or delivered
Essential conditions
Following conditions had been held in
State of West Bengal versus v.k.mandal and sons
1.act is done legally by one person to another person
2.he has done this work non gratuitously
3.other person has taken advantage of this work
.
Illustrations
A.a trademan leaves goods at b house by mistake .b treats the goods as his own .he is bound to pay A for him .
B A saves B property from fire .a is not entitled to compensation from B if the circumstances show that he intended to act gratuitously
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Section 71 . Responsibility of finder of goods ----at person who finds goods belonging to another and takes them into his custody is subject to the same responsibilty as a bailee .
Responsibility of that person who found goods
1.he must look after real owner of those goods
2.he must try to find real owner of that goods
3.if he has spent 2/3 money of the value of those goods .he need not to search the real owner of goods
4.in this situation the things can be sold he can retain his expenditure and keep safe remaining money to its orginal owner .
4.if thing is perishable that it can be sold
Section 72 . liability of person to whom money is paid or thing delivered by mistake or under coercion ----
At person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it .
Illustrations
A.A and B jointly own 100 rupees to c .A alone pays the amount to c and B not knowing this fact ,pays rupees over again to c .c is bound to repay the amount to b .
B.A railway company refuses to deliver up certain goods to the consignee except upon the payment of an illegal charges for carriage .the consignee pays the sum charged in order to obtain the goods .he entitled to recover so much of the charge as was illegally excessive .
Section 73 to 75 indian contract act
Chapter 6 ----the consequences of breach of contract
Section 73---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 a isny loss or damaged caused to him thereby
Which naturally arose in usual course of thing from such breach or which the parties knew
When they made
the 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
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 the failure to discharge it
Is entitled to receive the same compensation from the party in default
As if such person had contracted to discharge it and had broken his contract.
1.Anticipatory breach ----any promisor can give up his promise before the date of contract performance.another party can file suit immediately without any delay .this principle had been laid down in
Hochester versus De La tour
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2.can anticipatory breach is possible of contingent contract ?
Frost versus knight
Respondent promised with plaintiff to marry after the death of father .he informed plaintiff that he will not marry during life of his father . plaintiff had filed a suit immediately.
Types of damages
Normal damages ----
Joseph versus George monjely
When any patient had died during operation due to doctor's carelessness
Special damages
Koufas versus czarnilkow ltd.
Both parties knew about the special damages when they were entering into contact .aggrevied party aprised of those circumstances previously that special damages can be happened
Important land mark case
Hadely versus vexsandal 1854
Facts of the case
Plaintiff are owner of some mills.one mill had been closed to break of a crank shaft .this shaft had been given to respondent .but respondent had delayed to give this shaft to plaintiff .in such situation plaintiff had to face huge loss .
Decision ---respondent is not responsible for such huge loss because this is a remote loss .he can get only reasonable loss only .this is a special conditions which should be mentioned clearly .he can get general damages .
Case of special damages---
Victoria laundry versus newman industries ltd.
Plaintiff is partner in colouring firm and he used to do work of colouring they wanted to increase their business , having used a powerful boiler .respondent promised to give this boiler on 5 june .they could not give this boiler till 8 November .in this condition the plaintiff had to face colossal loss .
Decision ---the court had decided to give special damages in this situation.
According supreme court
Panna lal janki das versus mohanlal
Which party beaches the contract he will have to pay all damages for direct loss.but he will not responsible for remote and indirect loss
Damages for direct loss not for indirect loss .
Hobas versus londan and south western railway company
A train had been moved in wrong direction . plaintiff and his wife had to deboard on wrong station .they had no place to stay .they had to walk in mid night .his wife had suffers from cold and fallen ill.
Juri had decided 8 pond as for inconveniences and 20 pond for illness.
But in appeal only 8 pond as compensation had been allowed as direct loss.
But this decision had been criticised in
Macmohan versus fields
Where horses had been fallen ill due to keen winter respondent had been responsible for compensation
This principle had been laid down that no compensation can be got for that loss which is remote and indirect
This is also mentioned in this case that this applicable on this breach of obligation which are resemble to the contract .
This section provides two principles . compensation can be got for such loss and
A.those loss are natural first is objective
B.the parties knows about that loss
Second is subjective
Examples
A.there is no contract had been signed
No conditions of contract had been mentioned in this correspondence . plaintiff did not state any type of loss in this case
Important points
Nalini sheela versus subhramanyam chetiyaar shungoogam
This is very essential under section 73
1.the pleadings of damages must mentioned in contract
2.that must be proved by evidences .
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 salt petre ought to have been delivered .
B.A hires B 's ship to go to Bombay and there takes on board
On the first of January a cargo which A is to provide and to bring it to Calcutta .
The fright is to be paid when earned .
B's ship does not go to Bombay.but A has opportunities of procuring suitable conveyance for cargo upon terms as advantageous as those and which he had chartered the ship .A avails himself of those opportunities.but is put to trouble and expense is doing so .A is entitled to receive compensation from B in respect of such trouble and expense.
C.A contracts to buy at stated price 50 maunds of rice no time being fixed for delivery A afterwards Informs B that he will not accept the rice if tendered to him
B is entitled to receive from A .by way of compensation
D. A contracts to buy B's ship for 60,000/ rupees but breaks his promise .a must pay to b ,by way of compensation,the excess ,if any of contracts price ,over the price which B can obtain for the ship at the time of breach of promise .
E.a contract to let his ship to b for a year
From the first of January for a certain price
Freight rise and on the first January the hire obtainable for the ship is higher than contract price .
A breaks his promise .he must pay to B .by way of compensation .
A sum equal to the difference between contacts price and the price for which B could higher a similar ship for a year on and from the first of January.
F.A delivers to B ,a common carrier
a machine ,to be conveyed without delay to A 's mill
Informing B that his mill is stopped for want of machine .
B unreasonably delays the delivery of the machine and A in consequence
Loses a profitable contract with the government
A is entitled to receive from B by way of compensation the average amount of profit which would have been made by the working of the mill during the time that delivery of it was delayed
But not the loss sustained through the loss of the government contract
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Section 74 ---compensation for breach of contract where penalty stipulated for -----
When a contract has been broken ,if a sum is named in the contract as the amount to be paid in case of such breach
Or if the contract contains any other stipulation by way of penalty
The party complaining of the breach is entitled
Wheather or not actual damage or loss is proved to have been caused thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or as the case may be the penalty stipulated for .
Explanation ----a stipulation for increased interest from the date of default
May be a stipulation by way of penalty
Exception ----when any person enters into any bail bond,recognizance or other instrument of the same nature
Or
Under the provision of any law or under the orders of the central Government or of any state government
Gives any bond for performance of any public duty or act in which public are intersted.he shall be liable
Upon breach of the condition of any such instrument
To pay the condition of any such instrument to pay the whole sum mentioned there in
The amount can be divided into two parts
1.liquidated damages
2.penalty
Landmark decision
Dunlop newmatic tyre company limited versus new garage and motar company limited
Facts---the company of tyres had given tyre to a trader with this condition that he will not sell the tyres less than indicated price .otherwise he will have to pay 5 pond as penalty on each breach of contract .
House of lord had decided that this was damages not penalty
2.ford motar company versus Armstrong
This is a good example of penalty
.facts----the trader was retailer in this case .he had purchased some cats and parts of car that he will not sell these things less than indexed price .otherwise he will be given 250 pond as compensation at each breach
Court had assumed it as penalty
Supreme court had decided in following case if compensation limit had been fixed in contract .then plaintiff had not got compensation by common method .
Facts ---there was condition in manager that they had been dismissed ,they would have been got 6000/ or 10 % of net income which is greater .the had been dismissed before time .they had demanded compensation according 10% of net income.they were bound to get compensation 6000/. because they were bound according this clause
Illustrations
A.a contract with b to pay rs .1000 if he fails to pay b rs 500 on a given day .a fails to pay b rs 500 on that day b is entitled to recover from a such compensation not exceeding rs 1000 as court considers reasonable
B .A contract with b that if A practices as surgeon within calcutta he will pay b rs 5000/ a practices as a surgeon in Calcutta .b is entitled to such compensation.not exceeding Rs 5000/ as the court considers reasonable
C.A gives a recognizance binding him in a penalty of rs 500 to appear in court on certain days.he forfeits his recognizance .he is liable to pay the whole penalty
D.A gives B a bond for the repayment of Rs 1000/ with interest at 12 percent at the end of six months with a stipulation that ,in case of default ,interst shall be payable at rate of 75 percent from the date of default .this is stipulation by way of penalty and B is only entitled to recover from A such compensation as courts considers reasonable
E.A undertakes to repay B loan of Rs 1000 by five equal installments with a stipulation that in default of payment of any instalment the whole shall become due .the stipulation is not by way of penalty and the contract and the contract may be enforced according to its terms
F.A who owes money to B ,a money lender undertakes to repay him by delivering to him 10 maunds of grain on certain date and
Stipulated that in the event of his not delivering
The stipulated amount by the stipulated date
He shall be liable to deliver 20 maunds .
This is a stipulation by way of penalty and B is only entitled to reasonable compensation in case of breach
G.A borrows rs .100 from B
And gives him a bond for rs.200 payable by five yearly instalment of Rs. With stipulation that in default of payment of any instrument
The whole shall become due .this is a stipulation by way of penalty
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Section 75 -----party right ,fully rescinding contract entitled to compensation
------
A person who rightfully resescinds a contract is entitled to compensation for any damage which he has sustained through the non fulfilment of the contract
Illustration
A.a singer contracts with B the manager of theatre to sing at his theatre for two nights in every week during the next two months and B engages to pay her 100 rupees for such each night's performance.on the sixth A wilfully absence herself from theatre and B in consequence rescinds the contracts .B is entitled to claim compensation for damage which he has sustained through the non fulfilment of the contract .
Section 70.obligation of person enjoying benefit of non gratuitous act ----where a person lawfully does anything for another person or delivers anything to him ,not intending to do so gratuitously and such other person enjoys the benefit there of the latter is bound to make compensation to former in respect of or to restore the things so done or delivered
Essential conditions
Following conditions had been held in
State of West Bengal versus v.k.mandal and sons
1.act is done legally by one person to another person
2.he has done this work non gratuitously
3.other person has taken advantage of this work
.
Illustrations
A.a trademan leaves goods at b house by mistake .b treats the goods as his own .he is bound to pay A for him .
B A saves B property from fire .a is not entitled to compensation from B if the circumstances show that he intended to act gratuitously
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Section 71 . Responsibility of finder of goods ----at person who finds goods belonging to another and takes them into his custody is subject to the same responsibilty as a bailee .
Responsibility of that person who found goods
1.he must look after real owner of those goods
2.he must try to find real owner of that goods
3.if he has spent 2/3 money of the value of those goods .he need not to search the real owner of goods
4.in this situation the things can be sold he can retain his expenditure and keep safe remaining money to its orginal owner .
4.if thing is perishable that it can be sold
Section 72 . liability of person to whom money is paid or thing delivered by mistake or under coercion ----
At person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it .
Illustrations
A.A and B jointly own 100 rupees to c .A alone pays the amount to c and B not knowing this fact ,pays rupees over again to c .c is bound to repay the amount to b .
B.A railway company refuses to deliver up certain goods to the consignee except upon the payment of an illegal charges for carriage .the consignee pays the sum charged in order to obtain the goods .he entitled to recover so much of the charge as was illegally excessive .
Section 73 to 75 indian contract act
Chapter 6 ----the consequences of breach of contract
Section 73---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 a isny loss or damaged caused to him thereby
Which naturally arose in usual course of thing from such breach or which the parties knew
When they made
the 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
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 the failure to discharge it
Is entitled to receive the same compensation from the party in default
As if such person had contracted to discharge it and had broken his contract.
1.Anticipatory breach ----any promisor can give up his promise before the date of contract performance.another party can file suit immediately without any delay .this principle had been laid down in
Hochester versus De La tour
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2.can anticipatory breach is possible of contingent contract ?
Frost versus knight
Respondent promised with plaintiff to marry after the death of father .he informed plaintiff that he will not marry during life of his father . plaintiff had filed a suit immediately.
Types of damages
Normal damages ----
Joseph versus George monjely
When any patient had died during operation due to doctor's carelessness
Special damages
Koufas versus czarnilkow ltd.
Both parties knew about the special damages when they were entering into contact .aggrevied party aprised of those circumstances previously that special damages can be happened
Important land mark case
Hadely versus vexsandal 1854
Facts of the case
Plaintiff are owner of some mills.one mill had been closed to break of a crank shaft .this shaft had been given to respondent .but respondent had delayed to give this shaft to plaintiff .in such situation plaintiff had to face huge loss .
Decision ---respondent is not responsible for such huge loss because this is a remote loss .he can get only reasonable loss only .this is a special conditions which should be mentioned clearly .he can get general damages .
Case of special damages---
Victoria laundry versus newman industries ltd.
Plaintiff is partner in colouring firm and he used to do work of colouring they wanted to increase their business , having used a powerful boiler .respondent promised to give this boiler on 5 june .they could not give this boiler till 8 November .in this condition the plaintiff had to face colossal loss .
Decision ---the court had decided to give special damages in this situation.
According supreme court
Panna lal janki das versus mohanlal
Which party beaches the contract he will have to pay all damages for direct loss.but he will not responsible for remote and indirect loss
Damages for direct loss not for indirect loss .
Hobas versus londan and south western railway company
A train had been moved in wrong direction . plaintiff and his wife had to deboard on wrong station .they had no place to stay .they had to walk in mid night .his wife had suffers from cold and fallen ill.
Juri had decided 8 pond as for inconveniences and 20 pond for illness.
But in appeal only 8 pond as compensation had been allowed as direct loss.
But this decision had been criticised in
Macmohan versus fields
Where horses had been fallen ill due to keen winter respondent had been responsible for compensation
This principle had been laid down that no compensation can be got for that loss which is remote and indirect
This is also mentioned in this case that this applicable on this breach of obligation which are resemble to the contract .
This section provides two principles . compensation can be got for such loss and
A.those loss are natural first is objective
B.the parties knows about that loss
Second is subjective
Examples
A.there is no contract had been signed
No conditions of contract had been mentioned in this correspondence . plaintiff did not state any type of loss in this case
Important points
Nalini sheela versus subhramanyam chetiyaar shungoogam
This is very essential under section 73
1.the pleadings of damages must mentioned in contract
2.that must be proved by evidences .
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 salt petre ought to have been delivered .
B.A hires B 's ship to go to Bombay and there takes on board
On the first of January a cargo which A is to provide and to bring it to Calcutta .
The fright is to be paid when earned .
B's ship does not go to Bombay.but A has opportunities of procuring suitable conveyance for cargo upon terms as advantageous as those and which he had chartered the ship .A avails himself of those opportunities.but is put to trouble and expense is doing so .A is entitled to receive compensation from B in respect of such trouble and expense.
C.A contracts to buy at stated price 50 maunds of rice no time being fixed for delivery A afterwards Informs B that he will not accept the rice if tendered to him
B is entitled to receive from A .by way of compensation
D. A contracts to buy B's ship for 60,000/ rupees but breaks his promise .a must pay to b ,by way of compensation,the excess ,if any of contracts price ,over the price which B can obtain for the ship at the time of breach of promise .
E.a contract to let his ship to b for a year
From the first of January for a certain price
Freight rise and on the first January the hire obtainable for the ship is higher than contract price .
A breaks his promise .he must pay to B .by way of compensation .
A sum equal to the difference between contacts price and the price for which B could higher a similar ship for a year on and from the first of January.
F.A delivers to B ,a common carrier
a machine ,to be conveyed without delay to A 's mill
Informing B that his mill is stopped for want of machine .
B unreasonably delays the delivery of the machine and A in consequence
Loses a profitable contract with the government
A is entitled to receive from B by way of compensation the average amount of profit which would have been made by the working of the mill during the time that delivery of it was delayed
But not the loss sustained through the loss of the government contract
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Section 74 ---compensation for breach of contract where penalty stipulated for -----
When a contract has been broken ,if a sum is named in the contract as the amount to be paid in case of such breach
Or if the contract contains any other stipulation by way of penalty
The party complaining of the breach is entitled
Wheather or not actual damage or loss is proved to have been caused thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or as the case may be the penalty stipulated for .
Explanation ----a stipulation for increased interest from the date of default
May be a stipulation by way of penalty
Exception ----when any person enters into any bail bond,recognizance or other instrument of the same nature
Or
Under the provision of any law or under the orders of the central Government or of any state government
Gives any bond for performance of any public duty or act in which public are intersted.he shall be liable
Upon breach of the condition of any such instrument
To pay the condition of any such instrument to pay the whole sum mentioned there in
The amount can be divided into two parts
1.liquidated damages
2.penalty
Landmark decision
Dunlop newmatic tyre company limited versus new garage and motar company limited
Facts---the company of tyres had given tyre to a trader with this condition that he will not sell the tyres less than indicated price .otherwise he will have to pay 5 pond as penalty on each breach of contract .
House of lord had decided that this was damages not penalty
2.ford motar company versus Armstrong
This is a good example of penalty
.facts----the trader was retailer in this case .he had purchased some cats and parts of car that he will not sell these things less than indexed price .otherwise he will be given 250 pond as compensation at each breach
Court had assumed it as penalty
Supreme court had decided in following case if compensation limit had been fixed in contract .then plaintiff had not got compensation by common method .
Facts ---there was condition in manager that they had been dismissed ,they would have been got 6000/ or 10 % of net income which is greater .the had been dismissed before time .they had demanded compensation according 10% of net income.they were bound to get compensation 6000/. because they were bound according this clause
Illustrations
A.a contract with b to pay rs .1000 if he fails to pay b rs 500 on a given day .a fails to pay b rs 500 on that day b is entitled to recover from a such compensation not exceeding rs 1000 as court considers reasonable
B .A contract with b that if A practices as surgeon within calcutta he will pay b rs 5000/ a practices as a surgeon in Calcutta .b is entitled to such compensation.not exceeding Rs 5000/ as the court considers reasonable
C.A gives a recognizance binding him in a penalty of rs 500 to appear in court on certain days.he forfeits his recognizance .he is liable to pay the whole penalty
D.A gives B a bond for the repayment of Rs 1000/ with interest at 12 percent at the end of six months with a stipulation that ,in case of default ,interst shall be payable at rate of 75 percent from the date of default .this is stipulation by way of penalty and B is only entitled to recover from A such compensation as courts considers reasonable
E.A undertakes to repay B loan of Rs 1000 by five equal installments with a stipulation that in default of payment of any instalment the whole shall become due .the stipulation is not by way of penalty and the contract and the contract may be enforced according to its terms
F.A who owes money to B ,a money lender undertakes to repay him by delivering to him 10 maunds of grain on certain date and
Stipulated that in the event of his not delivering
The stipulated amount by the stipulated date
He shall be liable to deliver 20 maunds .
This is a stipulation by way of penalty and B is only entitled to reasonable compensation in case of breach
G.A borrows rs .100 from B
And gives him a bond for rs.200 payable by five yearly instalment of Rs. With stipulation that in default of payment of any instrument
The whole shall become due .this is a stipulation by way of penalty
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Section 75 -----party right ,fully rescinding contract entitled to compensation
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A person who rightfully resescinds a contract is entitled to compensation for any damage which he has sustained through the non fulfilment of the contract
Illustration
A.a singer contracts with B the manager of theatre to sing at his theatre for two nights in every week during the next two months and B engages to pay her 100 rupees for such each night's performance.on the sixth A wilfully absence herself from theatre and B in consequence rescinds the contracts .B is entitled to claim compensation for damage which he has sustained through the non fulfilment of the contract .
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