Remedies for Breach of Contracts in Bangladesh
Where one party fails to fulfill the obligations made in contract or does not perform intentionally or does not perform in accordance with the terms made in the agreement is said to be breached the contract. In case of breach of contract, many people think that damages are the only available remedy available but there are many remedies which may sort by the aggrieved party or the party who had suffered loss and this paper will describe those available remedies which may demand before the court by the party aggrieved.
In many commercial agreements or contracts, they contain the express provision for remedies in case of no express provision than the following remedies are always available.
Rescission of the contract: where one party promises to do some act but he fails to do so, therefore, the other party or the party aggrieved may sue for such to treat the contract as rescinded along refuse further performance. Here the aggrieved party will be free from all obligations as the other party failed to fulfill his contractual obligations.
Suit for Damages: section 73 of the Contract Act states that the party aggrieved is entitled to receive for any loss or damages suffered by him for the breach of contract and for which he can file a suit for getting a decree or claiming damages. The compensation is usually pecuniary for a suit of damages and it may nominal or substantial. Unlike other equitable remedies like specific performance or injunction, damages are available as of right and not the discretion of the court. In the case of Harley vs. Baxendale (1854) 9 Ex. 341 it was observed that the damages which ought to have received should be as much fairly and reasonably.
Suit upon Quantum and Meruit: It means as much as deserved or as reasonable the value of services. It may sort when a contract has been partly performed the aggrieved party and the other party has not fulfilled his part than a suit may be filled for the price to which portion performed before the breach of contract. In the case of Ref. Day vs. Caton (1876) 119 Mass. 513 stated that when an agreement is discovered to be void or the completion of the contract has been prevented by the act of the other party or others than the claim for quantum meruit may arise.
Suit for Specific Performance of Contract: when it is found that the damages occurred can not be compensated by the money of an act agreed to be done than a suit for specific performance of a contract may be filled. On another perspective specific Performance of the contract is granted when damages are not an adequate or appropriate remedy, this mostly happens in case of land sale contracts where the vendor refuses to convey title. According to section 12 of the Specific Relief Act, 1877 states that the specific performance of any contract is the discretion of the court to be enforced or not and provided four conditions where the court will consider to provide specific relief. It is to be kept in mind that the discretion of the court to provide the specific performance of the contract would be reasonable and guided by judicial principles so for demanding specific relief or suit for such the aggrieved party must have to prove that the compensation is not adequate for them. Also, the aggrieved party when asking for the specific performance of a contract may ask for compensation for the breach, in addition to or substitution to such performance as under section 19 of the Specific Relief Act, 1877.
Suit for Injunction: An injunction is such whereby one party is required to do or refrain from doing certain acts by the order of the court.Whereby a promisor undertakes to do something but he does not do so or promises not to do certain acts but carry on such means breaches terms and provisions than the party aggrieved may apply to the court for granting the injunction. The granting of an injunction by the court is discretionary but in certain cases to restrain the breach of contract the court will grant an injunction. Usually, the court will provide two types of injunction either a permanent or temporary injunction. Permanent or perpetual injunction is such where the aggrieved party have to file a separate suit for demanding this under section 54 of the Specific Relief Act, 1877 to prevent the breach of contract also in the case of Prof MA Raquib vs. Prof Zillur Rahman 37 DLR 83 held that no permanent injunction can be granted unless the applicant has any personal interest or any breach of obligation in the contracts. On the other hand, temporary injunction is such whereby one has to establish prima facie case and have to show that the aggrieved party will suffer irreparable loss or damages if such is not granted and this temporary injunction can be asked before court at any stage of the suit through an application under Order 39 rule 1 and 2 of the Code of Civil Procedure,1908. A temporary restraining order may be granted ex parte, therefore, the aggrieved party has to prove that there is an immediate prospective or reasonable apprehension of breach of the contract any time for which if happened he will suffer irreparable loss or damages.
Suit for Rectification or Cancellation of Contract: This is another sort of remedies in case of breach of contract. When by Fraud from the opposite party or through the mutual mistake of both parties a contract does not express their real intentions than the aggrieved party or both parties may apply for the rectification of the contract under section 31 of the Specific Relief Act, 1877. It was held in the case of Lalbanu Bibi vs. NourjanBanu 41 DLR 519 that the court will rectify the contract where the real intention is misrepresented. On the other hand where it is found that a contract which is void or voidable against a person and may cause serious injury to him or if a reasonable apprehension occurs of such than he may file a suit for the cancellation of the contract under section 39 of the Specific Relief Act, 1877. In the case of Chitta Janjan Chakraborty vs. Md. Abdur Rob 1997 BLD 126 stated that when a contract is void ab initio and the transaction is a nullity or only voidable than the plaintiff may ask for relief under section 39 of the Specific Relief Act for the cancellation of such.
Lastly from the above discussion it can be says that the remedies in case of breach of contract is a civil one and suit much be filled in the ordinary civil court before the time limits lapse and it is to be kept in mind that the limitations for bringing a suit in case of specific performance of contract are only one year as per article 113 of the Limitation Act, 1908. The aggrieved party may bring a suit for availing any of the above-mentioned remedies but it would be better to consult expertise or lawyer for availing the better remedies.