Define anticipatory breach of contract and provide an example.

Anticipatory breach signifies non-performance.

• One party signals non-performance.

• Example: A can't deliver cotton.

• Legal implications for breach arise.

Fill in the blank: Under Section 39 of the Indian Contract Act, anticipatory breach allows the promisee to ___ the contract or wait for the performance date.

Terminate

What are the effects of anticipatory breach on the promisee's obligations?

The promisee's obligations are affected.

• Relieved from performance duties.

• Can rescind the contract.

• May sue for damages immediately.

True or False: An actual breach of contract occurs when a party fails to perform their obligations on the due date.

True

List and describe two types of damages that can be claimed for breach of contract.

Two types of damages exist.

• Ordinary Damages: Losses from breach.

• Special Damages: Foreseen losses specified.

Riddle: I am a breach that happens before the due date, leaving the other party in doubt. What am I?

Anticipatory breach

Explain the difference between liquidated damages and penalties in contract law.

Liquidated damages are enforceable.

• Pre-determined amounts for losses.

• Aim to estimate actual damages.

• Penalties are unenforceable and excessive.

What is the legal significance of the case Hadley vs. Baxendale in determining damages for breach of contract?

Hadley vs. Baxendale defines contract damages.

• Focuses on foreseeability of damages.

• Distinguishes ordinary from special damages.

• Highlights importance of prior notice.

Fill in the blank: In the event of a breach, the injured party must take ___ steps to minimize their losses.

Reasonable

What remedy allows a party to receive payment for work done when no specific amount was agreed upon?

Quantum Meruit allows a party to claim reasonable compensation based on the value of work completed.

True or False: In Indian law, the distinction between liquidated damages and penalties is strictly enforced.

False. Indian law does not differentiate between the two; it focuses on reasonable compensation not exceeding the specified sum.

Describe the conditions under which damages for deterioration caused by delay can be claimed.

Damages for delay can be claimed.

• Physical deterioration of goods.

• Loss of special sales opportunity.

• Claims without prior notice allowed.

What are the two scenarios where vindictive or exemplary damages may be awarded?

Exemplary damages awarded in specific cases

• Breach of promise causes distress

• Cheque dishonor affects reputation

• Compensation aims to deter misconduct

Fill in the blank: When both parties agree on a predetermined sum for breach of contract, this is referred to as ___ damages.

Liquidated

What is the primary purpose of a penalty clause in a contract?

The primary purpose of a penalty clause is to deter the offending party from breaching the contract by imposing an excessive financial burden.