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What kind of damages does Section 73 of the Indian Contract Act, 1872 provide for breach of contract?

Section 73 of the Indian Contract Act, 1872 provides compensation for loss caused by breach that arises naturally or was known to be likely when the contract was made. It…

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What kind of damages does Section 73 of the Indian Contract Act, 1872 provide for breach of contract?

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Correct answer B

Section 73 of the Indian Contract Act, 1872 provides compensation for loss caused by breach that arises naturally or was known to be likely when the contract was made. It excludes remote and indirect loss and requires account to be taken of available means of reducing the loss. Section 74 separately governs reasonable compensation when the contract names a sum payable on breach or stipulates a penalty.

Option feedback

Option A

Section 74 addresses sums stipulated on breach. Section 73 provides compensation for loss assessed under its statutory rules.

Option B

Section 73 provides compensation for loss caused by breach that arises naturally or that the parties knew was likely when they made the contract.

Option C

Section 73 measures recovery by the compensable loss caused by the breach rather than by a penalty.

Option D

Section 73 provides compensatory damages, so there is a correct classification.

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