Liquidated damages and penalty for CLAT - Practice Questions & MCQ

Passage 

Read the following passage and answer the question

The Indian Contract Act 1872 is one of the oldest mercantile laws in the country. The law was enacted on the 1st of September 1872 and is applicable to the Whole of India. A contract defined under Section 2 (h) of the Indian Contract Act 1872 means, “any agreement which is enforceable by the law.”  The contracts can be written using formal or informal terms and can be entirely spoken or verbal. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach can be anything from a late payment to a more serious violation such as the failure to deliver a promised asset. 

“Breach of contract" is a legal term that describes the violation of an agreement or a contract that occurs when one party fails to fulfil its promises as per the provisions given in the agreement. The fundamental Breach of contract also involves interfering with the ability of another party to fulfil his/her duties. A contract can be breached in whole or in part. Most contracts end when both parties fulfil their contractual obligations, but when one of them violates it, a breach of contract happens. Breach of contract is one of the common reasons why contract disputes are brought to the court for resolution.

Under Section 73 of the Indian Contract Act 1872, “When a contract is broken, the party who suffers from the breach of contract is entitled to receive from the party who has broken the contract, compensation for any or damaged caused to him, which naturally arose in the normal course of things from the breach or which the parties knew when they made the contract to be likely to result from the breach of it.” Section 73 of the Indian Contract Act 1872 also mentions that the damage is only payable if the loss has been occasioned by the breach. No loss from the breach automatically leads to any damages. Compensation is not paid for any remote or indirect loss or damage sustained because of the breach. 

The section also adds that ‘In estimating the damage or loss from the breach of contract which existed or remedying the inconvenience caused by the non - performance of the contract must also be taken into account. At the date of the breach, the measure of damages upon a breach by the buyer is the difference between the market price and contract price at the time of the breach.

Question

. Krishna enters into a contract with Ram and promises that he will deliver 30 tins of sunflower oil on 12th February 2022. But on the scheduled day, the price of sunflower oil shot up, so he delivers 50 tins of soyabean oil. Decide

Passage 

Read the following passage and answer the question

The Indian Contract Act 1872 is one of the oldest mercantile laws in the country. The law was enacted on the 1st of September 1872 and is applicable to the Whole of India. A contract defined under Section 2 (h) of the Indian Contract Act 1872 means, “any agreement which is enforceable by the law.”  The contracts can be written using formal or informal terms and can be entirely spoken or verbal. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach can be anything from a late payment to a more serious violation such as the failure to deliver a promised asset. 

“Breach of contract" is a legal term that describes the violation of an agreement or a contract that occurs when one party fails to fulfil its promises as per the provisions given in the agreement. The fundamental Breach of contract also involves interfering with the ability of another party to fulfil his/her duties. A contract can be breached in whole or in part. Most contracts end when both parties fulfil their contractual obligations, but when one of them violates it, a breach of contract happens. Breach of contract is one of the common reasons why contract disputes are brought to the court for resolution.

Under Section 73 of the Indian Contract Act 1872, “When a contract is broken, the party who suffers from the breach of contract is entitled to receive from the party who has broken the contract, compensation for any or damaged caused to him, which naturally arose in the normal course of things from the breach or which the parties knew when they made the contract to be likely to result from the breach of it.” Section 73 of the Indian Contract Act 1872 also mentions that the damage is only payable if the loss has been occasioned by the breach. No loss from the breach automatically leads to any damages. Compensation is not paid for any remote or indirect loss or damage sustained because of the breach. 

The section also adds that ‘In estimating the damage or loss from the breach of contract which existed or remedying the inconvenience caused by the non - performance of the contract must also be taken into account. At the date of the breach, the measure of damages upon a breach by the buyer is the difference between the market price and contract price at the time of the breach.

Question

.Peter enters into a contract with John and promises that he will sing every Saturday and Sunday in his club for 1 hour during the next four months in exchange for Rs. 5,000. However, in the 4th month, he didn’t turn up due to a problem in his throat. This is an actual breach of contract on the part of Peter. Determine the status of the contract.

Passage 

Read the following passage and answer the question

The Indian Contract Act 1872 is one of the oldest mercantile laws in the country. The law was enacted on the 1st of September 1872 and is applicable to the Whole of India. A contract defined under Section 2 (h) of the Indian Contract Act 1872 means, “any agreement which is enforceable by the law.”  The contracts can be written using formal or informal terms and can be entirely spoken or verbal. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach can be anything from a late payment to a more serious violation such as the failure to deliver a promised asset. 

“Breach of contract" is a legal term that describes the violation of an agreement or a contract that occurs when one party fails to fulfil its promises as per the provisions given in the agreement. The fundamental Breach of contract also involves interfering with the ability of another party to fulfil his/her duties. A contract can be breached in whole or in part. Most contracts end when both parties fulfil their contractual obligations, but when one of them violates it, a breach of contract happens. Breach of contract is one of the common reasons why contract disputes are brought to the court for resolution.

Under Section 73 of the Indian Contract Act 1872, “When a contract is broken, the party who suffers from the breach of contract is entitled to receive from the party who has broken the contract, compensation for any or damaged caused to him, which naturally arose in the normal course of things from the breach or which the parties knew when they made the contract to be likely to result from the breach of it.” Section 73 of the Indian Contract Act 1872 also mentions that the damage is only payable if the loss has been occasioned by the breach. No loss from the breach automatically leads to any damages. Compensation is not paid for any remote or indirect loss or damage sustained because of the breach. 

The section also adds that ‘In estimating the damage or loss from the breach of contract which existed or remedying the inconvenience caused by the non - performance of the contract must also be taken into account. At the date of the breach, the measure of damages upon a breach by the buyer is the difference between the market price and contract price at the time of the breach.

Question

A, imported shipment of cars from China and shipment gets a gate which was insured by ABC Company for 100 crores. But due to some reasons half of the cars got damaged. A sued ABC Co. for the claim of 100 crores. Decide.

Passage 

Read the following passage and answer the question

The Indian Contract Act 1872 is one of the oldest mercantile laws in the country. The law was enacted on the 1st of September 1872 and is applicable to the Whole of India. A contract defined under Section 2 (h) of the Indian Contract Act 1872 means, “any agreement which is enforceable by the law.”  The contracts can be written using formal or informal terms and can be entirely spoken or verbal. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach can be anything from a late payment to a more serious violation such as the failure to deliver a promised asset. 

“Breach of contract" is a legal term that describes the violation of an agreement or a contract that occurs when one party fails to fulfil its promises as per the provisions given in the agreement. The fundamental Breach of contract also involves interfering with the ability of another party to fulfil his/her duties. A contract can be breached in whole or in part. Most contracts end when both parties fulfil their contractual obligations, but when one of them violates it, a breach of contract happens. Breach of contract is one of the common reasons why contract disputes are brought to the court for resolution.

Under Section 73 of the Indian Contract Act 1872, “When a contract is broken, the party who suffers from the breach of contract is entitled to receive from the party who has broken the contract, compensation for any or damaged caused to him, which naturally arose in the normal course of things from the breach or which the parties knew when they made the contract to be likely to result from the breach of it.” Section 73 of the Indian Contract Act 1872 also mentions that the damage is only payable if the loss has been occasioned by the breach. No loss from the breach automatically leads to any damages. Compensation is not paid for any remote or indirect loss or damage sustained because of the breach. 

The section also adds that ‘In estimating the damage or loss from the breach of contract which existed or remedying the inconvenience caused by the non - performance of the contract must also be taken into account. At the date of the breach, the measure of damages upon a breach by the buyer is the difference between the market price and contract price at the time of the breach.

Question

A, ordered an Infinix mobile from Flipkart, but the delivery of such a mobile phone got delayed by 7 days due to which A was not able to appear in the PUBG tournament. A filed legal case for breach and compensation of rupees 20,000. Decide