Section 61

Section 61 of the Indian Contract Act, 1872, states that where a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from the breach. This section is based on the principle that a party who has suffered a loss due to the breach of a contract should be compensated for the loss. The section further provides that in estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. The Supreme Court of India has held that the object of awarding damages is to put the party who has suffered by the breach of contract in the same position as if the contract had been performed. (Hadley v. Baxendale, (1854) 9 Exch 341).