When a party breaks the contract by refusing to perform his promise, breach of contract takes place. Following are the remedies available to the aggrieved party in the event of the breach of a contract:

1. Rescission of the contract,

2. Suit for damages,

3. Suit upon ‘quantum merit’,

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4. Suit for specific performance,

5. Suit for injunction.

1. Rescission of the Contract:

Where one of the parties to a contract commits breach, the other party may treat the contract as rescinded with the result that he is freed from all his obligations under the contract.

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Illustration:

X promises to deliver 10 bags of sugar to Y on a certain day and Y promises to pay the price on delivery of goods. On the appointed day, X does not deliver the bags. Y can rescind the contract and need not pay the price.

Under Section 64, when a party treats the contract as rescinded, he makes himself liable to restore any benefit he has received under the contract to the party from whom such benefit has been received. But if a person rightfully rescinds a contract, he is entitled to compensation for any damage which he has sustained through the non-fulfillment of the contract by the other party. (Section 75).

Section 35 of the Specific Relief Act, 1963 provides that “any person interested in a contract in writing may sue to have it rescinded”. Section 27 of this Act provides that the Court may grant rescission in the following cases:

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(i) Where the contract is voidable by the plaintiff; or

(ii) Where the contract is unlawful for causes not apparent on its face and defendant is more to blame than the plaintiff; or

(iii) Where a decree for specific performance of a contract of sale or of a contract to take a lease has been made and a default is made by the purchaser or the lessee in the payment of the purchase money or other sums which the Court has directed him to pay.

The Court may, however, refuse to rescind the contract:

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(i) Where the plaintiff has expressly or impliedly ratified the contract, or

Illustration :

Ramesh purchased shares on the faith of prospectus containing mis-statement. Ramesh, having come to know of the mis-statement attended the General meeting and accepted dividends. He cannot later on rescind the contract as he has waived his right by his conduct.

(ii) Where, owing to the change of circumstances (not being due to any act of the defendant himself), the parties cannot be restored to their original position; or

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(iii) Where third parties have, during the subsistence of the contract, acquired rights in good faith and for value; or

(iv) Where only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract.