Types of Damages under Indian Contract Act

Section Seventy three offers reimbursement for loss or harm because of the breach of contract. When a contract has been broken, the party that suffers from such infringement is entitled to acquire reimbursement for any loss or harm as a result of such infringement. Such reimbursement shall now no longer receive for any faraway and oblique loss or harm sustained due to the breach.

General damages

General damages refer to those damages which arose naturally during the normal course of the events. In relation to the pleadings, the complained of is presumed to be a natural and probable consequence with the result that the. In relation to proof, it refers to those losses, usually but not exclusively non-pecuniary, which in monetary terms are not capable of precise quantification.

Special damages

Special damages are those that do not, of course, arise from the breach of the defendant and can only be recovered if they were in the reasonable consideration of the parties at the time they made the contract. It refers to those losses that must be specifically pleaded and proven. It refers to those losses that can be calculated financially. It represents the exact amount of pecuniary loss that the claimant proves to have suffered from the set of pleaded facts.

Nominal Damages

If the defendant is found liable for breach of contract, the plaintiff is entitled to nominal damages even if no actual damage is proven. Nominal damages are awarded if there is an infringement of a legal right and if it does not give the rise to any real damages, it gives the right to a verdict because of the infringement.

Where the loss is small and quantifiable, the damages awarded, although small, are not nominal damages.

If the market rate on the date of the breach is not proven, the plaintiff shall be entitled to nominal damages. However, the fact that the buyer does not sustain any actual loss as a result of the seller’s failure to deliver the goods is no reason to award the buyer nominal damage.

Substantial Damages

In cases where an offense is proven, many authorities may claim substantial damages even if it is not only difficult but also impossible to calculate the damages with certainty or accuracy. In all these cases, however, the extent of the breach has been established. There was a complete failure to perform the contract on one side. However, where the breach is partial and the extent of the failure is determined, only nominal damage is awarded. The plaintiff who can not show that after the breach he would have had the contract performed, he is in a worse financial position, usually, recover only nominal damages for breach of contract.

Aggravated damages and exemplary damages

Aggravated damages, that compensate a victim for mental distress or injured sensations in circumstances where the injury was caused or increased by the manner in which the defendant committed the wrong or the defendant’s behavior following the wrong.

Exemplary damages are intended to give the punishment to the defendant an example they are punitive and not intended to compensate the defendant for loss, but rather to punish the defendant.

Liquidated and unliquidated damages

Damages are stated to be liquidated as soon as agreed and stuck through the events. It is the sum agreed through the events through settlement as payable at the default of one in all them, Section seventy four applies to such damages. In all different cases, the court quantifies or assesses the harm or loss; such damages are unliquidated. The events can also additionally handiest restoration an quantity as liquidated damages for unique varieties of a breach, then the party tormented by every other kind breach can also additionally sue for unliquidated damages attributable to such breach.

Where, below the phrases of the settlement, the client changed into entitled to say damages on the agreed price if the products had been now no longer introduced earlier than the constant date and in the event that they had been now no longer introduced inside seven days of the constant date, the client changed into entitled to cancel the settlement and pay assure quantity to the bank, however the items had been introduced inside the prolonged period. It changed into held that the client changed into only entitled to say damages on the agreed price and that the banking assure confiscation clause couldn’t be invoked because the settlement changed into now no longer cancelled.

Consequential Damage and Incidental Loss

Consequential damage or loss usually refers to pecuniary loss resulting from physical damage, such as loss of profit sustained due to fire damage in a factory. When used in the exemption clause in a contract, consequential damages refer to damages that can only be recovered under the second head in Hadley v Baxendale, i.e. the second branch of the section, and may also include recovery of profit and losses under the first branch.

Another term incidental loss refers to the loss incurred by the complainant after he became aware of the breach and made to avoid the loss, i.e. the cost of buying or hitting a replacement or returning defective goods.



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