The Ultimate Guide to Breach of Contracts

Apr 19, 2019 | 0 comments

A contract breach might sound like a commonplace for a layman but in regards to the legal landscape, there are diverse ramifications of the same. That said, every breach isn’t the same and before we delve deeper into this discussion, it is important to understand the type of contract breach and what aspects pave or rather escalate the given situation.Being one of the  top law firms in india we are sharing some pointers on the same.

Contract Breach: What does it signify?

A contract is a legal arrangement between two parties i.e. promisor and promisee which defines a proper flow pertaining to the fulfillment of certain obligations. A breach therefore involves an abrupt termination of the contract from a specific end and it may be regarded as an anticipatory breach or an actual breach— depending on the existing conditions.

Anticipatory Breach: Details

This form of contract breach is considered if it takes place before the actual period of performance. For example, if the promisor and promisee have made a legal arrangement regarding a certain product or service to be shared at a certain point in time and the promisor denies proceeding just before the inception of the contract; the act comes under the radar of an anticipatory breach.

In regards to the Indian Contract Act, Section 39— the anticipatory breach is stated as an act where the concerned party, in regards to a specific contract, refuses to perform the desired arrangements and disables promise fulfillment in its entirety. This allows the promisee to put an abrupt end to the existing contract provided continuance acquiescence isn’t assured.

Actual Breach: Details

This form of contract breach is taken into account if discrepancies are encountered during the time of contract performance. Put simply, actual contract breach happens when one of the two parties fails to execute his or her promises on the given day; thereby making the breach public in the form of verbal or written application. Thus, it would be a great idea to reach out to any top law firms in india to help you navigate such a situation.

Other Types of Contract Breaches

While we have discussed some of the most prominent types of contract breaches, there are a few others which can be taken into account.

  1. Minor Breach– A minor obligation breach which isn’t impactful enough to affect the concerned contract.
  2. Fundamental Breach– The most elementary aspect of the contract takes a hit which compromises the existence of the entire situation.
  3. Material Breach- A substantial part of the contract is breached which allows one party to press for damages even if the contract isn’t terminated.

How to Deal with Contract Breach?  Remedies that Hold

Understanding about contract breaches won’t help if the concerned parties aren’t familiar with the remedial measures. Here are some of the immediate actions that can be taken, in regards to an anticipatory, actual, fundamental, or material breach.

  • Suing

Even if the concerned party doesn’t end the contract in case of a breach, he or she has the right to sue the other person for monetary damages. In case of any of the mentioned breaches, the lawsuit can either be filed instantaneously or upon the completion of contract fulfillment date, under Section 73 of the Contract Act.

Another approach in case of a breach is to sue the party for performance i.e. instead of offering a monetary compensation, the guilty party is asked by the court to fulfill his or her performances within the mentioned timeline.

  • Filing for Contract Recession

In case of material or fundamental contract breach, the concerned authority has the power and right to appeal under the Indian Contracts Act, Section 75 i.e. to rescind the contract and ask for compensation.

  • Filing Injunction

The person who has breached the contract is herein restrained from undertaking any other professional activity before the dispute gets settled.

  • Appealing under the Act of Quantum Merit

This remedial measure comes in handy for the promisee provided he or she has delivered a specific portion of the mentioned products or services before being shunned by the promisor who terminates the contract, abruptly. This way filing for Quantum Merit makes sure that partial payment is made.

Inference

While contracts, both legal and verbal are indispensible aspects of our existence, breaches are almost as common as their inception. However, before handling any dispute regarding a contract breach, it is important to understand the overall premise, take a look at the party statements, and eventually make the remedial call. Being one of the topmost Legal Advisors in Delhi, SARC & Associates http://www.sarcassociates.com/ can help you out with any situation where there is a breach of Contract in a totally transparent manner.

About SARC Associates

SARC Associates is one of the leading financial advisors in Delhi offering legal expertise too and  established in the mid-eighties, under the aegis of Sunil Kumar Gupta, having its corporate office in New Delhi and offices across the country with footprints in London. SARC is manned by 17 consulting partners and more than 300 professionals. The professional culture at SARC is crafted to bring the best out of our people, addressing the most complex challenges and thereby driving the vision of our partnered Businesses and Communities. We offer services ranging from Business and Financial Advisory, Assurance, Tax and Compliances, Private Equity and Fund Raising, Litigations and Legal Advisory, FEMA and FDI among others.

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About SARC Associates

SARC Associates is one of the leading professional services organisations established in the mid-eighties, under the aegis of Sunil Kumar Gupta, having its corporate office in New Delhi, our branches are spread across the country with footprints in London

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