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The Supreme Court judgement, Kailash Nath Associates v. Delhi Development Authority consolidates the law on award of liquidated damages and stipulations on penalties. Contractual damages are to cover losses and not to profit from or penalise the party in breach. Stipulated amounts in damages or penalties are appraised by the courts and only a reasonable compensation is given. Earnest money, and its forfeiture, stood distinct. It could be forfeited without appraisal. The case integrates the different categories and re-states the principles for award of damages.
Keywords:
Damages,
Penalty,
Liquidated Damages,
Earnest Money,
Earnest Deposit,
Urban Development,
Large
© 2018 by the Indian Institute of Management, Ahmedabad
2018
Indian Institute of Management, Ahmedabad
Licensed re-use rights only. Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for classroom discussion. They are not designed to present illustrations of either correct or incorrect handling of administrative problems.
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