Section 75 of Indian Contract Act
Selvam Perumal
(Querist) 24 October 2009
This query is : Resolved
Dear Sir,
I am expecting your kind clarification on the following issues:
1. In a Contract for Employment the Staff wantonly committed a breach of Contract and failed to come for duty as such the employer had issued a notice under Section 75 of the Indian Contract Act for rescinding the contract and now he is intending to file a suit for damages as against the Staff for the loss caused by the staff.
2. But in the said Contract there is no Clause stipulating for damages in the event of breach of Contract, so under these circumstances whether a suit for damages will lie?
3. Since no penalty clause is stipulated in the Contract as such is there any yardstick available for ascertaining the “quantum of damages”?
4. Furthermore the Contract was not written in the Stamped Papers but it was written in the Plain white papers and signed by the Staff. Whether such a Contract is maintainable under law and whether it can be impounded during the trial stage?
Kindly advise me in this regard.
A V Vishal
(Expert) 24 October 2009
Without going through the contract it is difficult to comment, but generally if there are no clauses in such case, the provisions of the contract act will come into force.
Raj Kumar Makkad
(Expert) 24 October 2009
Your employer is 100% correct. If the terms of the contract have been violated by any party to the contract, the other party has definitely got a cause of action to claim damages though no specific term may exist in the contract. The contract need not be written on stamp paper.
The calculation of damages is measured the actual loss suffered by the other party.
Selvam Perumal
(Querist) 24 October 2009
Dear Sir,
I am very much grateful to all of you for kindly expressed your valuable opinion on this issue.
H. S. Thukral
(Expert) 31 October 2009
Such notice issued by the employer is not a contract but a notice of terrorem. As you said there is no clause in the contract for providing damages in breach of contract. The contract is for payment of wages in lieu of service provided by the employee. The principle of no work no pay shall apply in such case.
