Indian contract act, 1872
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BREACH OF CONTRACT
Breach means failure of a party to perform his or her obligation under a contract. Breach of contract may arise in two ways: (1) Actual breach of contract (2) Anticipatory breach of contract
ANTICIPATORY BREACH OF CONTRACT An anticipatory breach of contract is a breach of contrac occurring before the time fixed for performance has arrived. When the promisor refuses altogether to perform his promise and signifies his unwillingness even before the time for performance has arrived, it is called Anticipatory Breach. Anticipatory breach of a contract may take either of the following two ways: (a) Expressly by words spoken or written, and (b) Impliedly by the conduct of one of the parties. Example 1: Where A contracts with B on 15th July, 2016 to supply 10 bales of cotton for a speci ed sum on 14th August, 2016 and on 30th July informs B, that he will not be able to supply the said cotton on 14th August, 2016, there is an express rejection of the contract.
Effect of anticipatory breach: The promisee is excused from performance or from further performance. Further he gets an option: (1) To either treat the contract as "rescinded and sue the other party for damages from breach of contract immediately without waiting until the due date of performance; or (2) He may select not to rescind but to treat the contract as still operative, and wait for the time of performance and then hold the other party responsible for the consequences of non- performance.
ACTUAL BREACH OF CONTRACT In contrast to anticipatory breach, it is a cas of refusal to perform the promise on the scheduled date. The parties to a lawful contract are bound to perform their respective promises. But when one of the parties breaks the contract by refusing to perform his promise, he is said to have committed a breach. In that case, the other party to the contract obtains a right of action against the one who has refused to perform his promise. .
Actual breach of contract may be committed- (a) At the time when the performance of the contract is due. Example: A agrees to deliver 100 bags of sugar to B on 1st February 2016. On the said day, he failed to supply 100 bags of sugar to B. This is actual breach of contract. The breach has been committed by A at the time when the performance becomes due. (b) During the performance of the contract: Actual breach of contract also occurs when during the performance of the contract, one party fails or refuses to perform his obligation under it by express or implied act
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