Miley contracts to sing at Beyonce’s theatre for a fortnight, but unjustifiably abandons the remaining…
Section 74 permits reasonable compensation up to the stipulated sum. The named ₹1 crore is a ceiling, not an automatic award, and cannot be disregarded to award a larger sum…
Choose your answer
Miley contracts to sing at Beyonce’s theatre for a fortnight, but unjustifiably abandons the remaining performances after ten days, causing recoverable loss. Their contract names ₹1 crore as damages for breach. Under section 74 of the Indian Contract Act, 1872, which rule governs Beyonce’s compensation claim?
Answer and explanation
Correct answer B
Section 74 permits reasonable compensation up to the stipulated sum. The named ₹1 crore is a ceiling, not an automatic award, and cannot be disregarded to award a larger sum under that clause. The reasonable amount depends on the breach and legally recoverable loss.
Revised question: the original examination question was defective.
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