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A breach of contract is proved, but the claimant establishes no actual loss and the contract names no…

Nominal damages recognise a proved breach when the claimant has established no actual loss. Section 73 of the Indian Contract Act, 1872 addresses compensation for loss…

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A breach of contract is proved, but the claimant establishes no actual loss and the contract names no sum payable on breach. What type of damages may the court award merely to recognise the breach?

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Correct answer D

Nominal damages recognise a proved breach when the claimant has established no actual loss. Section 73 of the Indian Contract Act, 1872 addresses compensation for loss caused by breach. Section 74 addresses reasonable compensation where a sum is stipulated for breach, a distinct issue discussed in Maula Bux v. Union of India, (1969) 2 SCC 554.

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Option A

Exemplary damages punish misconduct. A token award that simply recognises the breach is nominal.

Option B

Substantial compensatory damages are intended to make good loss. The facts establish no actual loss.

Option C

Section 74 concerns reasonable compensation where the contract names an amount payable upon breach or contains a penalty stipulation. There is no such stipulated sum here.

Option D

Nominal damages are a token award recognising the breach when actual loss has not been established.

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