X, a builder, contracts with A to erect and finish a flat for him before 30th June 1997, in order that X may give possession of the flat by that time to B to whom A has contracted to let it. X is informed of the contract between A and B...... Decide with the help of relevant provisions of law and the case law, if any.

Question: X, a builder, contracts with A to erect and finish a flat for him before 30th June 1997, in order that X may give possession of the flat by that time to B to whom A has contracted to let it. X is informed of the contract between A and B at the time of entering into the agreement with A. X promised to erect and finish the flat and hand over the possession to B by 30th June 1997.

X builds the flat with a very low rate material as a result of which the flat falls down before the 30th June 1997 and has to be rebuilt by A, who in consequence loses that rent which he was to have received from C and is obliged to make compensation to B for the breach of his contract. What remedy do you advise to A against X? Decide with the help of relevant provisions of law and the case law, if any. [Punjab JS 2001]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [ X, a builder, contracts with A to erect and finish a flat for him before 30th June 1997, in order that X may give possession of the flat by that time to B to whom A has contracted to let it. X is informed of the contract between A and B at the time of entering into the agreement with A. X promised to erect and finish the flat and hand over the possession to B by 30th June 1997. X builds the flat with a very low rate material as a result of which the flat falls down before the 30th June 1997 and has to be rebuilt by A, who in consequence loses that rent which he was to have received from C and is obliged to make compensation to B for the breach of his contract. What remedy do you advise to A against X? Decide with the help of relevant provisions of law and the case law, if any.]

Answer

In the given scenario, A contracted with X, a builder, to erect and finish a flat before 30th June 1997, with the intention of giving possession to B as per their separate contract. However, due to X's use of low-quality materials, the flat collapsed before the agreed-upon date, resulting in A having to rebuild the flat and suffering financial losses. A is also obligated to compensate B for the breach of their contract.

In this situation, A may seek a remedy under Section 73 of the Indian Contract Act, 1872. Section 73 deals with the measure of damages in case of breach of contract where a party suffers loss or damage due to the breach. It states that the party who suffers the loss is entitled to receive compensation from the party who has breached the contract. The compensation should be such as may fairly and reasonably be considered to arise naturally from the breach or be within the contemplation of the parties at the time of making the contract.

Applying Section 73 to the given scenario, A can claim compensation from X for the losses suffered as a result of X's breach of contract. The damages would include the cost of rebuilding the flat using proper materials, any additional expenses incurred due to the collapse, and any other foreseeable losses directly resulting from X's breach. A may also claim compensation for the loss of rent from C, as it was a foreseeable consequence of X's failure to complete the flat on time.

The Principle underlying Section 73 is to put the injured party in the position they would have been in if the contract had been performed properly. The damages awarded should be reasonable and proportionate to the loss suffered by the innocent party.