According to Section 27 of the Indian Contracts Act, 1872, Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
When there is a breach of contract then the aggrieved party has the right to cancel the contract and sue the other party for damages under the provisions provided by Indian Contracts Act, 1872.
What is compensation of breach of contract under Indian Contracts Act, 1872 where penalty is stipulated for?
Breach of contracts can be divided into damages payable as Penalty or Liquidated Damages. Liquidated damages are imposed as compensation to the party whereas penalty is imposed for punishment.
What is compensation of loss and damage for breach of contracts under Indian Contracts Act, 1872 ?
Compensation for loss and damage are of 4 kinds:
a. Liability for Special Damages.
b.Liability for Exemplary Damages.
c. Liability to pay Nominal Damages.
d. Liability to pay damages for deterioration caused by the day.
When there is a default from either side of the party in either not performing or payment then the contract is said to be breached and the party sustaining loss has a right to get damages.
According to Section 18 of the Indian Contracts Act, 1872, Misrepresentation means and includes-
a) The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
b) Any breach of duty which, without an intent to deceive, gains and advantage to the person committing it, or any one claiming under him; by misleading another to his prejudice, or to the prejudice of any one claiming under him;
c) Causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
According to Section 17 if the Indian Contracts Act, 1872, Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agents , with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
- the suggestion as a fact, of that which is not true, by one who does not believe it to be true;
- the active concealment of a fact by one having knowledge or belief of the fact;
- a promise made without any intention of performing it;
- any other act fitted to deceive;
- any such act or omission as the law specially declares to be fraudulent.
According to Section 16 of the Indian Contracts Act, 1872, the following acts are called as undue influence;
a) A contract is said to be induced by “undue influence” where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.
b) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another-
- where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
- where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
c) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
According to Section 15 of the Indian Contracts Act, 1872, Coercion is the committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.