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Question

Section 74 of the Indian Contract Act, 1872 applies:

Option A: To cases where an amount received under the contract is sought to be forfeited.

Option B: To cases where the aggrieved party is seeking to recover a fixe amount on breach of contract

Option C: To cases where in consequence of breach no legal injury at all has resulted

Option D: Both a and b

Correct Answer

Option: b

Explanation

According to Section 74 of the Indian Contract Act, 1872, if the parties fix the damages, the Court will not allow more. However, it may award a lesser amount, depending on the case. Hence, the suffering party gets reasonable compensation but no penalty.

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