If you appoint a contractor/vendor to do something for you in a specific manner but the contractor/vendor provide a low quality delivery what you can do?
This is called loss of expectation. For example, you have contracted the other party to build something according to a specific measurement/structure/design but the contractors builds something which is not exactly of the same measurement/structure/design, rather for the lack in quality in the finished product the total expectation of you is frustrated, then what remedy you have? This is called wasted expenditure under the British laws. This is the usual measure for damage in a contract. The principle is “the innocent party should be put in a situation as if the contract has taken place.” Hence, it could also include the losses associated with the loss of expectation. This is contrasted with the reliance loss. Under the British Law the claimant can claim for both profit and reliance.
But under the laws of Bangladesh the claimant cannot claim for the remote or indirect loss. Under the laws of Bangladesh Loss of expectation has been addressed in section 73 of the Contract Act 1872. The section and related illustration is as follows:
Compensation for loss or damage caused by breach of contract Compensation for failure to discharge obligation resembling those created by contract
73. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.
Explanation – In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account.
Illustrations
(f) A contracts to repair B’s house in a certain manner, and receives payment in advance. A repairs the house, but not according to contract. B is entitled to recover from A the cost of making the repairs conform to the contract.
(l) A, a builder, contracts to erect and finish a house by the first of January, in order that B may give possession of it at that time to C, to whom B has contracted to let it. A is informed of the contract between B and C. A builds the house so badly that, before the first of January, if falls down and has to be rebuilt by B, who, in consequence, losses the rent which he was to have received from C, and is obliged to make compensation to C for the breach of his contract. A must make compensation to B for the cost of rebuilding the house, for the rent lost, and for the compensation made to C.
