Why a 150-Year-Old Law Is Holding Back India’s Modern Contracts
Why a 150-Year-Old Law is Stalling Modern Contracts By Adv. Mamta Singh Shukla, Supreme Court of India India, a rising economic titan with a $4.5 trillion dream, is being shackled by a 150-year-old ghost. Its law of damages, rooted in the dusty, paternalistic anxieties of colonial rule, is no longer a legal framework but an economic drag. Foundation of India’s Law of Damages The current law is derived from English common law principles distinguishing between compensation and penalties: Section 73 of Indian Contract Act 1872 – Deals with unliquidated damages providing compensation for loss or damage caused by breach of contract. Section 74 of Indian Contract Act 1872 – Deals with liquidated damages, situations where the parties stipulate the amount of damages in advance. Jurisprudence built on Sections 73 & 74 of the Indian Contract Act was a necessary shield for the illiterate farmer against the extortionist landlord. The cours...