Question

m ltd., contract with shanti traders to make and deliver certain machinery to them by 30.6.2017 for ` 11.50 lakhs. due to labour strike, m ltd. could not manufacture and deliver the machinery to shanti traders. later, shanti traders procured the machinery from another manufacturer for ` 12.75 lakhs. due to this shanti traders was also prevented from performing a contract which it had made with zenith traders at the time of their contract with m ltd. and were compelled to pay compensation for breach of contract. advise shanti traders the amount of compensation which it can claim from m ltd., referring to the legal provisions of the indian contract act, 1872.

Answer 1

According to the Indian Contract Act, of 1872, Shanti Traders can claim compensation from M Ltd. for breach of contract. The compensation amount would be calculated based on the price difference between the contract and the sum Shanti Traders paid to another manufacturer for the machinery.

Step-by-step explanation:

Under the Indian Contract Act, of 1872, Shanti Traders can claim compensation from M Ltd. for breach of contract.

The compensation amount would be the difference between the contract price and the price Shanti Traders had to pay to procure the machinery from another manufacturer, which is Rs. 12.75 lakhs - Rs. 11.50 lakhs = Rs. 1.25 lakhs.

In addition to this, Shanti Traders can also claim compensation for the losses they incurred due to the breach of contract with Zenith Traders. The specific amount of compensation will depend on the terms of the contract and the losses suffered by Shanti Traders.