Specific Performance Of Contract

The article will focus on the legal concept of specific performance of a contract and the various
legal elements involved for the enforcement of Specific performance of contract, which includes
the conditions required to secure specific relief, exception to such specific relief, situation in
which the specific performance of a part of contract is enforceable and types of contracts that
can't be specifically performed.
The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An
agreement enforceable by law”.
A contract is an agreement upon sufficient consideration to do or not to do a particular act.
Enforceable by law. Every contract requires the parties to have the capacity to enter into a
contract attained the age of majority, a sound mind, legal object, consideration, acceptance and
mutual consent amongst the parties entering into a legal contract. If the party on whom the
contractual obligation rests and fail to discharge duties that are meant to be fulfilled and there is
a breach of contract either the courts decides to provide compensation of the damages
(substitutional remedy) or specific performance of the contract(specific remedy).
In case breach of contract and the damages can't be calculated or ascertained, the other party will
have a right to sue for performance of the contract. An equitable relief called the ‘Specific
Performance’. The court if is not able to grant adequate remedy in the form of damages then
specific performance relief is provided.
Such orders are discretionary, as with all equitable remedies, it is enforced when a defendant has
failed to perform the part of consideration agreed upon, so the availability of this remedy will
depend on whether it is appropriate in the circumstances of the case.
Under current law, courts grant specific performance when they perceive that damages will be
inadequate compensation. Specific performance is deemed an extraordinary remedy, awarded at
the court’s discretion.
When can specific performance of a contract enforced?
Section 10 of the Specific Relief Act, 1963 , states “ Cases in which specific performance of
contract enforceable.
Except as otherwise provided in this Chapter, the specific performance of any contract may, in
the discretion of the court, be enforced—
(a) when there exists no standard for ascertaining actual damage caused by the non-performance
of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance
would not afford adequate relief.
Explanation:
As in certain cases, such as a breach of contract to transfer immovable property, when the
damages can't be adequately relieved by compensation being not a proper remedy for the
damages suffered by the plaintiff to be restored adequately, further the damages can't be
calculated and ascertained.
Specific contract also applies in the cases of contract to movable property, such that the movable
property is of great value and rarity if they are ‘articles of unusual beauty, rarity and distinction
or of special value to the party suing by reason of personal or family association or like.
Specific performance of a part of a contract an exception to section 10.
Section 12 of The Specific Relief Act 1963 is an exception, it applies to a contract in which the
party is unable to perform the whole of his part with reasonable circumstances, the unperformed
part however has to be a considerable portion or a small portion that doesn't effect the subject
matter of the contract, in such matter the court may, at the suit of either party, direct the specific
performance of so much of the contract as can be performed, and award compensation in money
for the deficiency.
This provision can be invoked only where terms of the contract permit segregation of interests
and rights of parties in the property, and if the intention is to the contrary, the provision cannot
be attracted.
Under section 14 of the Act, the following contracts cannot be enforced:
1. Contracts in which compensation in money is an adequate relief.[ See section 14 (1)
(a) of S.R.Act) , [Devendar Singh vs Syed Khaja, AIR 1973 SC 2457]
2. Contracts involving personal service.[Vaish Degree College, Shamli vs Lakshmi
Narayan, AIR 1976 SC 888]
3. Contracts with uncertain terms.
4. Contracts in its nature determinable
5. Contracts which or not valid in Law
6. Contracts involving continuous supervision of the Court
7. Contracts to build or repair works ( subject to some exceptions) [Union Construction Co. vs
Chief Engineer,Estern Command,Lucknow,AIR 1960 All 72]
8. The Contract by Hindu parent or guardian to give a child in marriage cannot be
specifically enforced. [Gumpat Narain Singh inre, ILR 1 Cal.74
9. Arbitration matters- Any contract to refer differences (existing or future) to arbitration must
satisfy the requirements of the Arbitration Act and must be specifically enforced only as per the
former. However, the existence of a contract which does not satisfy the former would none-the-
less bar a suit for specific performance of a subject that is contracted to be referred. This is
provided under S.14(2) of the S.R.A.
Exceptions
Despite the provisions of section 14 (1), the court may impose specific performance in the
circumstances provided for in section 14 (3)
To execute a mortgage or guarantee the repayment of any loan that the borrower is unwilling to
repay immediately: provided that, when only part of the loan has been advanced, the lender is
prepared to advance the part remaining loan in terms of the contract; or
Where the suit is for-
The signing of a formal deed of partnership, the parties having started to carry on the activities of
the partnership; or
 The purchase of a share of a partner in a company,
 When the suit relates to the performance of a contract for the construction of any building
or the execution of any other work on the land:
Certain conditions being maintained, these being: -
· The building or other work is described in the contract in sufficiently precise terms for the court
to determine the exact nature of the work;
· The plaintiff has a substantial interest in the performance of the contract and the interest is of
such a nature that compensation in money for the breach of the contract does not constitute
adequate redress; and
· The defendant has, in performance of the contract, obtained possession of all or part of the land
on which the building is to be built or other work is to be carried out.