Question

CONTRACT LAW:

Please Answer these questions as detailed as possible

6.   What is a court trying to achieve when it makes an award of damages in contract law?

7.   Describe the different types of damages that can be awarded.

  

8.   Describe what the following clauses which appear in a commercial contract: force majeure clause; exemption clause.

9.   Describe the different forms of dispute resolution that could be provided for in a contract.

Answer 1

(7) DIFFERENT TYPES OF DAMAGES-

1. COMPENSATORY DAMAGES- As the name suggests compensatory damges are paid when the other party has faced or suffered losses for the breach of contract. If any of the party when done agreement breaches the contract , then the party who have breached the contract have to comoensate to the party who have suffered the loss. Comoemsatory damages are of two types-

• Expectation damages- These are the damages which the party who have suffered the losses expects to get compensated based on the terms under the contract
• Consequential damages - These are the damages which are paid for the indirect loss or damages to the party who have suffered loss, which are not covered under the terms of contract

2. LIQUIDATION DAMAGES -   These are damages which are already agreed under the contract that if the damages happens to any of the party then it shall be paid for breaching the contract. These damages are stated specifically under the contract

3. NOMINAL DAMAGES - These are the damages which are not in monetary terms , in short the party who have suffered the loss have not suffered the damages in monetary terms but the judge for showing that the damaged party is right ask the breaching party to pay nominal or very small amount as damages to party who have sufferd the loss.

4. PUNITIVE DAMAGES- Punitive damages are the damages which are paid for punishing the party who have breached the contract. But these damages are paid rarely but they are generally paid for om commiting the fraud.

(8) FORCE MAJEURE CLAUSE- This clause means that Sometimes it becomes impractical, illegal, or immposible to perform a contract then force majeure clause is applied for temporarily suspending or termimating yhe contract or performance of its obligations. These generally happens on the event of riots, wars , lockouts, earthquake, floods, fire, etc. For eg if goods are shipped from one place to another but due to bad atmosphere or hurricane ship sunked in the ocean than its become impossible to send the goods then the party will not be liable to pay the damages as its become immposible to perform the contract and force majeure clause will be applied.

EXEMPTION CLAUSE-   Exemption clause means that a party who have to pay damages is excluded or is limited to pay the damages. This is already done as a agreement in the contract done between the two parties. For example when you park a vehile it is mentioned at the black of slip that they will only pay you half an amount(assume) of the total price if the vehicle is lost. Here the party is liable to pay the damages only upto a certain limit mentioned in the contract.

(9) DIFFERENT TYPES OF DISPUTE RESOLUTION-

• Mediation - To solve the disputes among the two parties a neutral person works as meditor to solve the disputes in between the parties. The main idea for keeping a mediator is that he is neutral and any of the party is free to explore the grevianves and feeling so that he can listen and take decision voluntarily. His decisions are not binding he only helps to solve them.
• Abritration- Sometimes to solve disputes both the parties approach for the arbitrage who serves a judge between the parties . He is a neutral person who judges and takes the decison after listing to both the parties and his decisions are binding on both parties.
• Litigation - This is most comman type of dispute resolution. In this the judge or the jury take legal decisiom for solving the disputes after hearing both the parties and verifing all the evidences in the court of law.

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