Breach of Contract in India

Contracts are the backbone of commercial and personal transactions, establishing the rights and obligations of the parties involved. However, when one party fails to fulfill their contractual obligations, it constitutes a breach of contract. In India, enforcing a breach of contract involves several legal steps, governed primarily by the Indian Contract Act, 1872, and the Specific Relief Act, 1963.

Understanding How to Enforce Breach of Contract in India

A breach of contract occurs when one party fails to perform their obligations as stipulated in the agreement. This failure can be due to various reasons, such as refusal to perform, inability to perform or performing the contract in a manner that is inconsistent with its terms. Breaches can be classified as minor or material, with material breaches providing grounds for the aggrieved party to terminate the contract and seek remedies​​.

Legal Remedies to Enforce Breach of Contract

When enforcing a breach of contract in India, the aggrieved party has several legal remedies available:

• Damages

Damages are the most common remedy for breach of contract. The Indian Contract Act, 1872, provides for compensatory, liquidated and unliquidated damages. Compensatory damages aim to put the aggrieved party in the position they would have been in had the contract been performed. Liquidated damages are predetermined by the parties during the formation of the contract, while unliquidated damages are assessed by the court based on the actual loss suffered​​.

• Specific Performance

Specific performance is a remedy that compels the breaching party to fulfill their contractual obligations. This remedy is typically granted when monetary compensation is inadequate, such as in contracts involving unique or irreplaceable items or immovable property. The Specific Relief Act, 1963, outlines the conditions under which specific performance may be granted​.

• Injunctions

An injunction is a court order that prohibits a party from performing a specific act or compels them to perform an act to rectify the breach. Injunctions can be temporary or permanent and are used to prevent further harm or to maintain the status quo until the dispute is resolved​​.

Filing a Civil Suit

Steps to Enforce a Breach of Contract

To enforce a breach of contract, the aggrieved party must follow specific legal procedures:

• Documentary Evidence: Gather all relevant documents, including the contract, correspondence, and any evidence of the breach and resulting damages. These documents will be critical in proving the breach and quantifying the loss suffered.
• Legal Consultation: Consult with a lawyer to assess the strength of your case and determine the appropriate legal remedies. The lawyer will help in drafting a plaint, the initial document filed in court to commence a lawsuit​​.
• Filing the Suit: File the suit in the appropriate court. For contracts involving immovable property, the suit should be filed in the court with jurisdiction over the property’s location. For movable property or monetary claims, the suit should be filed based on the contract terms or the defendant’s location​.
• Court Proceedings: After filing, the court will issue a summons to the defendant to respond. The parties will then exchange pleadings, and the court may conduct hearings to examine evidence and arguments before delivering a judgment.

Conclusion

Enforcing a breach of contract in India involves navigating a structured legal framework designed to provide fair remedies to the aggrieved party. Understanding the types of breaches, available legal remedies, and the process of filing a civil suit is crucial for effectively addressing contract disputes. Whether seeking damages, specific performance, or an injunction, it is essential to consult with legal professionals to ensure a robust approach to enforcing contractual rights​​.