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Section 61: Compensation for Breach with Stipulated Penalty

61.Compensation for breach of contract where penalty is stipulated

(1)Where a contract is breached, and a sum is named in the contract as the amount to be paid in case of a breach or where a contract contains any stipulation by way of penalty, the party who complains of the breach is entitled, whether or not actual damage or loss is proved to have been caused by the breach, to receive from the party who breaches the contract, reasonable compensation not exceeding the amount named or the penalty stipulated, as the case may be.

(2)The penalty stipulated under subsection (1) may provide for an interest on the amount of compensation to be paid.

(3)Notwithstanding subsections (1) and (2), a person shall be liable, upon breach of the condition of an instrument, to pay the whole sum mentioned in the instrument, where that person—

(a)enters into any bail, bond, recognisance or other instrument of the same nature; or

(b)gives a bond for the performance of a public duty or an act in which the public is interested, under any law or under the orders of the central government or of any local government.

Plain English Summary

If a contract contains a clause specifying the amount to be paid in case of a breach (a penalty), you are entitled to reasonable compensation even if ...

AI-generated, for reference only.

🔍Search Tips
  • • Search by keyword: "land", "tax", "arrest"
  • • Use exact phrases: "land commission"
  • • Enter citations: 45, 45(3)(a), 45:3:a
  • • Press / to search, Esc to close

Searching within Contracts Act. Faster results.