Damages
/ˈdæmɪdʒɪz/
Legal Remedy Term
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Definition
A monetary award by a court to compensate a party for loss suffered due to breach of contract or tort. Types: compensatory (restoring the claimant to their pre-breach position), nominal (where breach is proven but no loss suffered), liquidated (pre-agreed sum in the contract), punitive/exemplary (awarded to punish egregious conduct, rare in contract law), and general vs. special damages. Section 73 of the Indian Contract Act codifies the rules on damages for breach of contract.
Examples
Case Study
In Fateh Chand v. Balkishan Das (1964), the Supreme Court held that the rule against penalties applies in India under Section 74 of the Contract Act — liquidated damages clauses are enforceable only up to the actual proved loss, and courts can award a reasonable sum not exceeding the stipulated amount. India thus differs from English law, where liquidated damages and penalties are more rigidly distinguished.
Key Cases
Fateh Chand v. Balkishan Das
1964AIR 1964 SC 538
Section 74 Contract Act applies whether the sum is liquidated damages or a penalty. Courts award a reasonable sum not exceeding the stipulated amount. Distinguished English law approach on penalty clauses.
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