Where the amount specified in the contract is likely to be a true prior estimate of the damage caused by the breach, it is called “one-time damages”, otherwise the amount is called a “fine” under Section 74 and Section 73 of the Indian Contract Act, 1872. It is also commonly believed that a “fine” is an amount specified in a contract to prevent a breach. It is intended to provide triple protection: For the injured party, it may constitute the only possibility for damages that cannot be proven with certainty; For the violator, it has the effect of limiting the…
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