Specific performance is a legal remedy where a court orders a party to fulfill their obligations under a contract. It is an equitable relief, meaning it is not granted automatically but at the discretion of the court. The aim is to ensure justice when monetary compensation is insufficient.
Cases for Enforcement
According to The Specific Relief Act, 1877, Section 12 outlines scenarios where specific performance is enforceable:
- When the act agreed upon is part of a trust.
- When there is no standard to ascertain the actual damage caused by non-performance.
- When monetary compensation for non-performance would not provide adequate relief.
- When it is probable that monetary compensation cannot be recovered for non-performance.
- As per the Explanation of The Specific Relief Act, 1877, Section 12, the court presumes that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, unless proven otherwise.
Illustrations
- A agrees to sell a house to B for Rs. 1,000. B is entitled to a decree directing A to convey the house to him, he paying the purchasemoney.
Discretion of the Court
The Specific Relief Act, 1877, Section 22 clarifies that the “jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so”. The court’s discretion must be sound and reasonable, guided by judicial principles, and subject to appellate review.
Circumstances for Discretionary Refusal
The court may refuse specific performance in the following cases:
- When the circumstances give the plaintiff an unfair advantage over the defendant, even without fraud or misrepresentation.
- When the performance of the contract would cause hardship to the defendant that they did not foresee, while non-performance would not cause such hardship to the plaintiff.
Circumstances for Discretionary Grant
The court may grant specific performance where the plaintiff has done substantial acts or suffered losses as a result of a contract capable of specific performance.
Who May Obtain Specific Performance
As per The Specific Relief Act, 1877, Section 23, specific performance can be obtained by:
- Any party to the contract.
- The representative in interest or the principal of any party, unless the contract involves personal skills or stipulates against assignment.
- Beneficiaries of a marriage settlement or family compromise.
- A remainder man, in certain cases where a tenant for life entered the contract.
- A reversioner in possession.
Contracts Not Specifically Enforceable
The Specific Relief Act, 1877, Section 21 specifies contracts that cannot be enforced:
- Contracts for which monetary compensation is an adequate remedy.
- Contracts with minute or numerous details, or dependent on personal qualifications.
- Contracts lacking reasonable certainty in their terms.
- Contracts that are revocable in nature.
- Contracts made by trustees in excess of their powers or in breach of trust.
- Contracts by corporations or public companies exceeding their powers.
- Contracts involving continuous duties extending beyond three years.
- Contracts where the subject matter has ceased to exist before the contract was made.
Specific Performance of Part of Contract
The Specific Relief Act addresses situations where only part of a contract can be performed.
- Section 14: If the unperformed part is small and admits monetary compensation, the court may direct specific performance of the rest, with compensation for the deficiency.
- Illustration: If A contracts to sell B 100 bighas of land, but 2 bighas belong to a third party, the court may order A to convey the 98 bighas and compensate B for the remaining 2 bighas.
- Section 15: If the unperformed part is a considerable portion or does not admit monetary compensation, specific performance cannot be decreed. However, if the other party is willing to relinquish all claims and compensation, the court may direct performance of the available part.
- Section 16: When a part of a contract can and ought to be specifically performed and stands independently from the part that cannot be specifically performed, the Court may direct specific performance of the former part.
- Section 17: The court shall not direct the specific performance of a part of a contract except in cases coming under one or other of the three last preceding sections
Compensation for Breach
The Specific Relief Act, 1877, Section 19 allows a party suing for specific performance to also claim compensation for breach of contract, either in addition to or in substitution for the performance.
Illustrations
- A contracts to sell a hundred maunds of rice to B. B sues to compel A to perform the contract or to pay compensation. The Court finds a valid contract, broken by A, but that specific performance is not the proper remedy. The court shall award to B such compensation as it deems just.
- A, a purchaser, sues B, his vendor, for specific performance of a contract for the sale of a patent. Before the hearing, the patent expires. The Court may award A compensation for the nonperformance of the contract.
Personal Bars to Relief
As per The Specific Relief Act, 1877, Section 24, specific performance cannot be enforced in favor of a person:
- Who could not recover compensation for its breach.
- Who has become incapable of performing, or violates, any essential term of the contract.
- Who has already chosen their remedy and obtained satisfaction for the breach.
- Who had prior notice of a settlement on the subject matter.
Enforcement Against Parties and Subsequent Title Claimants
The Specific Relief Act, 1877, Section 27 states that specific performance may be enforced against:
- Either party to the contract.
- Any person claiming under a title arising subsequently to the contract, except a transferee for value who has paid in good faith and without notice of the original contract.
- Any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant.
Conclusion
Specific performance is a discretionary remedy used by courts to ensure contractual obligations are met when monetary damages are insufficient. Governed by the Specific Relief Act of 1877, it is applied judiciously, considering the nature of the contract, the conduct of the parties, and the specific circumstances of each case. The court balances the need for enforcement with principles of fairness and equity, and may also award compensation for losses incurred due to the breach.