https://www.taxtmi.com/caselaws?id=197089 Unilateral recovery of liquidated damages from other contracts is impermissible before adjudication of liability. Sections 73 and 74 of the Indian Contract Act, 1872 require compensation for breach to be assessed as reasonable compensation for loss actually suffered or as a genuine pre-estimate of damages, but a damages claim does not become a present debt until a court or other competent adjudicatory forum determines liability and quantifies the loss. Although liquidated damages may reduce the need for strict proof of actual loss, they still require a judicial or quasi-judicial finding that loss or legal injury occurred and that the stipulated sum is enforceable. The impugned recovery communication was therefore unsustainable. en-us Tue, 09 Oct 2012 00:00:00 +0530 Tue, 26 Dec 2017 11:39:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=197089 Unilateral recovery of liquidated damages from other contracts is impermissible before adjudication of liability. Sections 73 and 74 of the Indian Contract Act, 1872 require compensation for breach to be assessed as reasonable compensation for loss actually suffered or as a genuine pre-estimate of damages, but a damages claim does not become a present debt until a court or other competent adjudicatory forum determines liability and quantifies the loss. Although liquidated damages may reduce the need for strict proof of actual loss, they still require a judicial or quasi-judicial finding that loss or legal injury occurred and that the stipulated sum is enforceable. The impugned recovery communication was therefore unsustainable. Case-Laws Indian Laws Tue, 09 Oct 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=197089