Question

Legal principle :when there is breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party. However, the parties are free to agree as to damages payable n advance in case three is breach of contract.

Factual Situation: Mr. Ramesh entered into a contract with Mr. Ramakrishna for selling his green Alto Car for Rs. 3 Lakhs. Mr. Ramakrishan was to pay Rs. 3 lakhs on or before 25 April, 2005 and take possession of the car. The party failing to honor the contract has to pay Rs. 40,000 as damages to the other party. Mr. Ramakrishna has not performed his part of the contract . Mr. Ramesh is claiming Rs.40,000.

• A. Mr Ramesh can sell the the car in the second hand market and if he suffers any loss, then only he can claim that amount from Mr Ramakriishna.
• B. Mr Ramakrishna s liable to pay the agreed damages.
• C. Mr Ramesh has to prove that the he has suffered Rs 40000 as damages to get it.
• D. None of the above.

Answer 1

Answer: (B)

Mr Ramakrishna s liable to pay the agreed damages.

Mr. Ramakrishna is liable to pay for the damages.

Section 74 the Indian Contract Act tells about this above mentioned principle.

The measure of pay can't be changed regardless of whether the real harm or damage caused might be more or lesser than the sum through legitimate enquiry. In this way, Mr. Ramesh is qualified for get a pay of Rs 40,000.

Hence, B is the correct option.