Question

Golden Foods (GF) agreed to supply 2,500 cans to Riaz Grocery Stores (RGS). According to the agreement, the date of delivery was 31 August 2017. However, on the due date GF refused to supply the cans. Under the provisions of the Contract Act, 1872, what would be your answer, if GF supplied the cans on 12 September 2017 and RGS accepted the performance; but suffered a loss on account of delayed supply?

its business law subject

Answer 1

According to Indian contract act , 1872 - A contract must be performed i.e parties have to perform their obligation decided under the contract. A contract if not performed, the party who is not performing the contract must compensate the aggrieved party in form of damages which is known as liquidated damages which is usually predetermined under the contract. Even Aggrieved party can also ask the non performing party to specifically perform what he has actually promised.

In this case, Golden foods agreed to supply 2500 can to Riaz grocery store on 31st August 2017. But on due date Golden foods refused to supply the cans. If Golden foods supply the can on 12 September 2017 ,then also he has to compensate the loss caused to Riaz grocery store between this period in form of liquidating damages ,no matter Golden foods supply the can on future date but he did not supplied the can on due date hence he has to compensate the loss to Riaz grocery store