Damages for the Breach of Contract

According to section 74 of the contract Act, when a contract has been broken if the sum is named in the contract as the amount to be paid in case of such breach the party complaining of the breach is entitled to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or the penalty proved for. The aggrieved party cannot recover simpliciter that sum whether as penalty or liquidated damages but must prove the actual damages they have suffered. It is therefore obligatory for the plaintiff to show how much loss if any has been caused to them on account of the failure on the part of the defendant to completed the work in time and it is then only that the court can award them reasonable compensation for the damages suffered.

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