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Saturday, July 16, 2011


The terms damages may be defined as the monetary compensation payable by the defaulting party to the aggrieved party for the loss suffered by him. The aggrieved party may therefore bring an action for damages against the party who is guilty of the breach of contract. The primary aim of damages is to compensate the aggrieved party, and to place him in the same position which he would have occupied had the breach of contract not occurred. It may, therefore, be noted that the damages are given by way of compensation for the loss suffered by the aggrieved party, and not for the purpose of punishing the default party.

 In a suit for damages, the Plaintiff is required to prove the following:

(1) The existence of a concluded contract between the parties;

(2) There is a clear breach of the terms and conditions of the contract by the Defendants;

(3) That breach on the part of the defendant has caused certain losses to the plaintiff, giving rise to a claim to sue for damages;

(4) Proving the actual extent of losses suffered by the plaintiff directly attributable to the breach of the terms and the clauses of the contract by the defendant;

(5) Quantifying the damages and most importantly by mitigation of damages that is to say, a person claiming damages to claim only such extent of damages, which are actually suffered as an inevitable direct consequence of the breach of contract by the defendant even after the plaintiff had taken all possible prudent steps to minimize the extend of losses.

It is only if the plaintiff establishes the actual quantum of damages on the basis of the above principles, a suit for damages can be decreed by Courts and not otherwise.

 [The above as observed by the Courts in Venkatesh Construction Company, Bangalore V Karnataka Vidyuth Karkhane Limited, Bangalore, M/s Murlidhar Chiranjilal V Harishchandra Dwarkadas and Another, M.Lachia Setty and Sons Limited V Coffee Board, Bangalore and C.T Xavier V P.V Joseph] 13

Prepared by: S. Hemanth

Advocate at Hemanth & Associates