Multiple choice

When a contract has been broken, the party who suffers by such breach is entitled to receive ______ damages from the party who has broken the contract.

  1. liquidated

  2. compensatory

  3. penal

  4. unliquidated

  5. None of these

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option (1) is correct: Under Section 73 of the Indian Contract Act, 1872, when a contract has been broken, the party who suffers by such breach is entitled to receive damages, from the party who has broken the contract, compensation for any loss or damage caused to him and is thereby called liquidated damages. Option (2) is incorrect: Are not compensatory damages. Option (3) is incorrect: Are not penal damages.