Indian Contract Act Section 73 — Compensation for loss or damage caused by breach of contract
CHAPTER VI OF THE CONSEQUENCES OF BREACH OF CONTRACT
Commercial / Corporate
Summary
When a contract is broken, the person who suffers because of that breach is entitled to receive compensation from the person who broke the contract. This compensation covers any loss or damage that naturally arose in the usual course of things from the breach, or that both parties knew, at the time they made the contract, was likely to result from the breach. However, compensation is not given for any remote or indirect loss or damage caused by the breach.
When an obligation that is similar to one created by a contract has been incurred and has not been discharged, any person injured by that failure to discharge is entitled to receive the same compensation from the party in default as if that person had contracted to discharge the obligation and had broken the contract.
In estimating the loss or damage arising from a breach of contract, the means that existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account.
Official Text
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract.—When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.
Explanation.—In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. Illustrations