Specific Performance of Contract

 Introduction:

Specific performance is equitable relief provided by the court to impose the duty of doing what he agreed to try and do by contract against a defendant. Therefore, the remedy of specific performance compares with the remedy by way of negligence for breach of contract, which provides pecuniary compensation for failure to fulfil the contract terms. Damages and specific performance are solutions available when the contract violates obligations; the previous could be a ‘substitutional’ remedy, and also the latter a ‘specific’ remedy. Relevant performance remedy shall incline by way of exception.

First, the applicant seeking this remedy must persuade the court that the same old remedy for damages is insufficient, with the presumption that damages might not be sufficient in cases of contracts for the transfer of immovable property. carrying out isn’t always granted even in these cases since this is often a discretionary remedy.

The statutory limitation period for a specific performance suit is three years from the date set for performance, or, if no such date is specified, if the plaintiff has found that performance has been declined.

Illustrations

• A is the landowner. He concluded an unregistered sales agreement in favour of B and received Rs. 50,000/- as a price advance of Rs.1,00,000/-. A will perform a Registration Sale deed within three months from the day the acquisition agreement is signed. Still, A turned down implementing Registration Sale deed and sale to C for the next price of the said property. B may sue for similar results against A. Without question, B may file a suit for similar results from the instance above.
• A and B are joint tenants of land, whose undivided freedom is also alien to the survivor within the course of his life, but which, per that right, is transferred to him. A contract to sell his moiety to C, and he dies. C will enforce the performance of a particular contract against B.
• The above example, which is definitely covered by the terms of section 15 of the Act, is basically this case and shows that a co-parcener buyer can enforce specific performance against its contract’s opposite co-parceners.
• Contracts granting to B an under-lease of property owned by A under C and applying to C for a license required for the validity of the under-lease and paying to B Rs. 10,000 if the license is not obtained. A declines to use and offers payment of B Rs 10,000. However, if C consents to issue the license, B is entitled to own the contract expressly enforced.
• A deal to sell a bit of land made of 100 bighas to B. It seems that A belongs to 50 bighas of the house, and also the other 50 bighas to a stranger, who refuses to give them. A cannot obtain a decree against B for the precise performance of the contract; but if B is willing to pay the agreed price and to require the 50 bighas belonging to A, waiving fine to compensation for the deficiency or loss sustained by A thanks to negligence or default, B shall be entitled to a decree ordering A to convey those 50 bighas to A upon payment of the acquisition money

Section 10 of the Specific Relief Act, 1963, states “ Cases within which carrying out of contract enforceable are

Except as otherwise provided during this Section, the particular execution of any contract may be enforced at the court’s discretion —

(A) where no norm exists for assessing the harm caused by the non-compliance

The act agreed to be executed; or

(B) where the act decided is specified reimbursement in cash for its inability to figure doesn’t afford adequate relief.

Explanation: The court shall presume — unless and until the contrary is proven —

(i) that a breach of a contract for the transfer of immovable property cannot be sufficiently compensated by money compensation; and

(ii) the violation of a contract for the transfer of movable property will be remedied during this way except within the following cases:

(A) where the land isn’t, or is of interest, a normal trade article or  the complainant’s value, or consists of products not easily available in the market;

(B) where the estate is owned by the defendant because the plaintiff is as agent or trustee.

There is a powerful distinction between the situations that make to the filing of a claim for actual performance within the event of a violation of the recitals of a meeting for due performance during which the parties have agreed to consent and conduct, and people that may provide sufficient relief for the award of compensation.

Damages Cannot be Ascertained

The law is founded on the uncertainty of the calculation of damage in circumstances in which there is little on which they can be founded, but conjecture or surmise. So where A agrees to buy, and B agrees to sell, a picture of a dead painter and two rare vases of China, A which clearly compels B to fulfil this contract, for there is no norm to assess the actual harm that will be caused by its failure to perform.

By seeking damages for breach of contract, the applicant disentitles himself to handle the contract, either initially or subsequently, by way of modification, from alleging different performance of the identical contract as an alternate event. Under Rule 7 of the CPC, such conflicting words aren’t allowed.

Nevertheless, a very contract stipulation to repay the amount paid and to pay compensation if the vendor sells the property to another party does not limit the correct to specific results

Compensation Not  Adequate Relief

Special production is not provided for conditions where compensation is sufficient relief. Harm is also used as an unsuccessful remedy. After being hard to calculate.

Thus, the precise performance of a contract is also required for the execution of a mortgage for advanced money.

A contract for the execution of the contracted work would fall within the categories of contracts described during this section as being specifically enforceable, but the relief isn’t appropriate and thus not granted because the work could be a kind that a court of justice doesn’t have the means to supervise. Therefore a court doesn’t usually offer this remedy on a building or engineering work contract.

Contract to Transfer Immovable property

The opinion that a violation of land contract can’t be sufficiently compensated for the particular existence of the property because damages might not be a full solution for the customer, to whom the property may have a peculiar and unique value, whether or not measured on the overall money value of the land.

Contract Regarding Movable property

A contract for the specific items shall be implemented by way of particular performance whether it’s articles of outstanding quality, rareness and distinction or of interest to the suing party on the grounds of non-public or family affiliation or similar.

Presumption

This section poses an assumption that within the case of transfer of immovable property, compensation wouldn’t be sufficient, and within the case of violation of transfer of movable property, it might be sufficient. Therefore the party arguing compensation is sufficient or insufficient must prove it, respectively.

Section 12 states,

Specific performance of a part of a contract.

(1) The court shall not direct the specific performance of a part of the contract, except as given hereinafter.

(2) Where a contract can not complete a part of the contract but the part which has to be left unfulfilled bears only a small proportion of the total value and accepts compensation in cash and the court can, at the request of either party, direct the particular performance as far as possible of the full amount of the contract and award compensation in cash for the deficiency.

(3) When a contract is unable to hold out the whole part thereof and also the part which must be left unworked either —

(A) forms an over sized a part of the full, while the award is accepted in

Currency; or

(B) doesn’t accept cash compensation;

He is not entitled to receive a decree for a selected performance; however, the court can, at the request of the opposite party, direct the defaulting party to execute specifically the maximum amount of its a part of the contract because it can, if the opposite party —

(I)in the case observed in clause (a), pay or has paid the agreed consideration for the complete contract reduced by the consideration for the part that has to be left unfulfilled and, within the case remarked in clause ( b), pay or has paid the consideration for the complete contract with none reduction; and

(ii) in any case, waives all claims in respect of the performance of the remaining part of the contract and therefore the right to recovery, either for the fault or for the loss or harm suffered by the defendant.

(4) Where part of a contract which may and will be clearly concluded by itself is on a separate and independent basis from another part of the identical contract which might not or shouldn’t be clearly executed, the court can guide specific execution of the previous portion.

Section 14 of the Special Reliefs Act (S.R.A.), 1963 allows for such cases where the precise execution of a contract is unlikely. These are discussed below

Not clearly enforceable contracts.-

Where compensation in cash could be a appropriate relief:

Contracts whose inability to perform is adequately accounted for by the payment of damages can’t be explicitly executed as per S. 14(a) The Act. for instance, a commodity-supply contract is typically not strictly enforceable.

Where precise criteria cannot be applied within the material terms:

S. 14(b) states that a contract containing a second or more details or so conditional on the personal credentials or ability of the parties or otherwise of their life can not enforce strict compliance with its material requirements on the court.

A private service or job contract, for example, is not enforceable by or against the employer, only damages may also be sought.

A contract which is determinable in its nature:

The term determinable implies a situation where, following compliance by the court; the parties will return to their original position immediately, thereby making any compliance futile. For example, if A and B partnership contracts without a complicated and expeditious duration, the partnership can not be enforced as it could easily be broken immediately.

A contract whose success includes performing an ongoing obligation which the court is unable to supervise:

The Court’s difficulty in supervising this is the key reason why reasonable output in certain contracts can not be clearly enforced. So the duty of a landlord to own a housekeeper is not strictly enforceable.

Exceptional Circumstances

• Similar behavior will put the defendant in serious distress.

•An unconscionable deal.

• Common law damages are readily available, or the loss of the defendant is easy to recover and hence the damages are sufficient.

•Misbehavior by the claimant (unclean hands).

•Unable to attain execution.

•Performance is personalized service

•Too ambiguous a deal to follow.

• The contract may well be terminated at will (that means either party can renege without notification).

•That consumer protection laws that forbid the termination of a consumer contract by an organization at will (e.g. Unfair Terms in Consumer Contracts Regulations 1999)

•The contract needed continuous scrutiny.

•The initial agreement to the contract lacked mutuality.

•No consideration was granted for the contract.

•Clear performance of contracts that are invalid or unenforceable shall not be granted; The exception to the present (in equity) is that the estoppel or part-performance relation.

Where an injunction is issued to ban an employee from working for a competing employer whether or not specific output can’t be obtained. The lead case is Lumley v Wagner, which may be a decision made in English.

Even in England and Wales, under s. 50 Under the Senior Court Act of 1981, the court has the ability to grant the plaintiff compensation in lieu of the performance (or injunction) chosen. These damages will normally be assessed on the same basis as damages for breach of contract, namely placing the defendant in the position he would have had the contract executed.

Conclusion

Since party conduct is very important in a particular performance suit, the party seeking relief from specific performance must approach the Court of Justice with clean hands. Therefore, due care and consideration must be taken when drafting the parties’ complaint and written statement, and the relief must be transparent and precise. I agree with Lord Chancellor Cottenham’s remarks in Tasker v. Small that it is not disputed that, in general, the parties to the contract are only the proper parties to a bill for specific performance of a sales contract; and, if the ground of the jurisdiction of courts of equity in such suits is considered, it could not be otherwise properly. For these cases, the Court exercises jurisdiction. Since, in many cases, a court of law, which only provides damages for the non-performance of the contract, does not afford an effective remedy. Yet in equity as well as in law, the contract represents the right and governs the parties’ liabilities; and the object of all proceedings is to position the complaining party in the same condition as the defendant decided that he should be placed in as nearly as possible.

References:

• Tasker v.small [1836] EngR 780
• www.legalserviceindia.com
•   www.indiankanoon.org

                                                                                                                                BY

SHAIK UZMA