Section 75 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 75 is one sentence. A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained through the non-fulfilment of the contract. It closes Chapter VI on the consequences of breach of contract. If you are about to cancel a contract because the other side has failed, our legal notice drafting service can help you put the cancellation and the claim in one notice.
A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained through the non-fulfilment of the contract. The word that matters is "rightfully": the right to rescind must exist. The Act's single illustration: a theatre manager rescinds after a singer wilfully stays away on the sixth night, and claims compensation. Sections 76 to 123 of the Act have been repealed, which is why the next section in force is 124.
The text
"A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained through the non-fulfilment of the contract."
Break it into elements:
| Element | What it means |
|---|---|
| A person who rightfully rescinds | The person must have a right to rescind. The section does not itself create that right; it assumes it. |
| a contract | Any contract in which the right to rescind exists. |
| is entitled to compensation | The consequence is a right to compensation. |
| for any damage which he has sustained | The compensation is for damage he has actually sustained. |
| through the non-fulfilment of the contract | The damage must flow from the non-fulfilment. |
Where does a right to rescind come from? The Act gives several examples in sections you have already met in this series: a contract becomes voidable at the option of the prevented party where the other prevents performance (section 53; see sections 51 to 53), where time is of the essence and is missed (section 55; see section 55), and the promisee may put an end to a contract on a refusal of performance in its entirety (section 39). Section 64 deals with the consequences when a person at whose option a contract is voidable rescinds it; the source footnote under section 64 points to this section.
The Act's illustration
A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week during the next two months, and B engages to pay her Rs. 100 for each night's performance. On the sixth night A wilfully absents herself from the theatre, and B, in consequence, rescinds the contract. B is entitled to claim compensation for the damage which he has sustained through the non-fulfilment of the contract.
This is the same set of facts that runs through illustrations to sections 39, 65 and 75. Read together:
| Section | What the Act says on the same facts |
|---|---|
| 39(a) | B is at liberty to put an end to the contract. |
| 65(c) | B, having rescinded, must pay A for the five nights she had sung. |
| 75 | B is entitled to claim compensation for the damage sustained through the non-fulfilment. |
How section 75 sits with sections 64, 65 and 73
- Section 64: on rescission of a voidable contract, the other party need not perform, and the rescinding party must restore benefits received so far as may be.
- Section 65: restitution of advantages under a void agreement or a contract that becomes void.
- Section 75: compensation for damage sustained through non-fulfilment, to a person who rightfully rescinds.
- Section 73: compensation for loss caused by breach, with the limits discussed in section 73.
Section 75 does not say how the compensation is measured. The text uses "any damage which he has sustained through the non-fulfilment". It does not repeat the limits of section 73, and it does not say they apply. This article therefore states no measure; refer to the text of section 73 and to legal advice for how the two sections work together.
Why the section numbers jump from 75 to 124
Sections 76 to 123 (Chapter VII, "Of sale of goods") were repealed by the Indian Sale of Goods Act, 1930 (3 of 1930), section 65, and the source copy shows each of them as "Rep. by s. 65, ibid." The next section in force is section 124, on contracts of indemnity.
A modern example (ours)
Pixel Print agrees to print and deliver 10,000 calendars to Quest Corp by 1 December for Rs. 5 lakh, time being expressly of the essence. Pixel misses the date by three weeks. Quest rescinds the contract and has to buy replacement calendars at Rs. 6 lakh from another printer. Because Quest rightfully rescinded, section 75 entitles it to compensation for the damage it sustained through the non-fulfilment. On these round numbers the extra Rs. 1 lakh paid is the kind of loss it would claim; whether and how far it is recoverable is a matter of the rest of the Act and the contract.
What can the parties change?
Section 75 has no "contrary intention" proviso. The parties can, however, set out in the contract the events that give a right to terminate and the notice required. Where the right to rescind is clear on the face of the contract, the question under s.75 is more straightforward. Where it is uncertain, an incorrect rescission carries risk, because the section applies only to a person who "rightfully" rescinds.
Practical points
- Confirm the right to rescind before you act: a prevention, a refusal, a missed essential date, or a contractual termination right.
- Send a written rescission that states the grounds and the date; see our article on sections 66 and 67 for how rescission is communicated.
- Return what you must; see section 64.
- Quantify your damage from the non-fulfilment with documents.
- Reserve your claim in the same notice.
Need help cancelling a contract and claiming loss?
Cancelling a contract without a clear right can turn you from claimant to defaulter, so the first step is to check the ground for rescission. Our legal notice drafting team can prepare a notice that records the breach, states the rescission and claims compensation for the damage. Bring the contract and the correspondence.
Key takeaways
- A person who rightfully rescinds a contract is entitled to compensation for any damage sustained through non-fulfilment (s.75).
- The right to rescind must exist; the section applies to one who "rightfully" rescinds.
- The Act's illustration: the theatre manager who rescinds after the singer wilfully stays away on the sixth night.
- Sections 76 to 123 are repealed, so the next section in force is 124.
- The section does not state a measure of compensation.
Read next
- Section 74: liquidated damages and penalty stipulated in contract
- Section 124: contract of indemnity defined
- Sections 63 to 65: remission of performance, rescission and restitution
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.