Chapter I – Introduction

When two parties reach an agreement, there must be a process in place to ensure that both
parties adhere to the terms. Self-enforcement (e.g., posting bonds, cancelling a commercial
relationship), reputation (e.g., jeopardising a future commercial relationship), organisational
(e.g., third-party audits), technology (e.g., to monitor sales), and, of course, contract law are
the key contract enforcement techniques. From a broader economic perspective, the question
is not whether a contract can be enforced, but rather how much different enforcement
mechanisms cost and how effective they are at increasing trust between contracting parties.
The costs of enforcement must not outweigh the benefits of enhanced contractual
commitment in order to be effective.

Important English laws related to enforcement of contracts:

1. The Unfair Contract Terms Act 1977 (UCTA) – The UCTA 1977 provisions are
intended to safeguard contracting parties by limiting the extent to which a party can
utilise contractual clauses to restrict or avoid liability for a wide range of contract and
other responsibilities, including the duty of care in the tort of negligence.
2. Consumer Rights Act 2015 – The Sale of Goods Act 1979 and Supply of Goods and
Services Act 1982 were replaced by the Consumer Rights Act 2015. The new act sets
out rights of consumers buying products, services and digital content. Under the
Consumer Rights Act all products must be of satisfactory quality, fit for purpose and
as described. Nonfulfillment of any of the criteria gives the consumer right to claim
under the act. The act also made Alternative Dispute Resolution available to all
businesses, which was before only restricted to a few sectors.
3. The Late Payment of Commercial Debts Regulations 2013
4. Late Payments Directive – The regulation simplifies the process of pursuing payment
within the European Union, decreasing the culture of late payment and making on-
time payment the norm. If debtors do not pay for goods and services on time, they are
required to pay interest and refund the creditor's reasonable recovery costs.
5. Law of Property Act 1925 –

UK has two ways to solve contractual disputes – Litigation and Alternative Dispute
Resolution (ADR)

Litigation
There are many laws The Limitation Act of 1980 (as amended) establishes the time limit
within which a claim must be filed in order to avoid it becoming time barred. The defendant
will have a complete defence to the claim if the limitation period has elapsed. The duration of
the limitation period is determined by the nature of the cause of action.

It is insufficient to have a contract law on the books. The function and practises of the legal
institutions that enable the proper execution of contract law are equally important. The legal
institutions concern court organisation, an independent and competent judiciary, the legal
profession, enforcement services, and the law-making process itself. The Business and
Property Courts of England and Wales, which is a section of the High Court, hear the
majority of substantial business cases. The following sub-divisions are most relevant for
enforcement of contracts:

 Business List: This is a broad list split into three sub-divisions that handle:

o General business disputes;

o Financial services disputes and regulatory disputes; and
o Disputes involving pensions.

 Commercial Court: Contracts, insurance and reinsurance, the sale of commodities,

the import, export, and transportation of products, banking and financial services,
agency and management agreements, and the construction of ships are all dealt with
by the Commercial Court. Disputes stemming from arbitration processes and awards
are also handled by the Commercial Court.

 Financial List: This is a list of experts who deal with banking and financial services
claims for more than GBP50 million, as well as disputes that need financial market
knowledge or are of broad interest to the financial markets.

 Insolvency and Companies List: This list is for cases involving corporate
bankruptcy and other business-related issues, such as shareholder conflicts.

 Intellectual Property List: Disputes involving trademarks, copyright, patents, and

other types of intellectual property are heard on this list.

 Property, Trusts and Probate List: This list hears cases involving land rights, trust
issues, and probate (the act of dealing with a person's assets after death).
Alternative Dispute Resolution

Exclusive dependence on formal contract enforcement methods (i.e., litigation through the
legal system) can be costly and time-consuming. Alternative Dispute Resolution systems aim
to resolve disagreements between parties quickly and fairly. When engaging into a contract,
the parties have the option of submitting any potential disputes to arbitration. Arbitration is a
very attractive alternative to litigation as it saves a lot of time and resources of both the
parties. The following are some of the ways that arbitration varies from litigation:

 Arbitration is a mutually agreed-upon process in which all parties to the arbitration

proceedings have consented to submit the matter to arbitration.

 The parties choose the procedural norms that will apply.

 In most cases, the procedures are kept private.

The decisions on the merits are final and cannot be appealed (although in certain limited
circumstances the court of the seat of the arbitration can set aside the award).

The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards of

1958 makes arbitration awards generally enforceable (New York Convention).

Alternative Dispute Resolution

https://www.lexology.com/library/detail.aspx?g=f05aa41f-e860-4413-9a47-6df5c0df0a59

https://www.doingbusiness.org/en/data/exploreeconomies/united-kingdom#DB_ec

https://www.lawteacher.net/free-law-essays/contract-law/uk-contract-law.php

https://uk.practicallaw.thomsonreuters.com/7-502-0631?
transitionType=Default&contextData=(sc.Default)#co_anchor_a976683

https://www.tollers.co.uk/enforcing-commercial-contracts/
Introduction:

Contracts are an important and inevitable part of day to day business. When a party does not go
through with the contractual obligations, the aggrieved part can sue for damages. However, in certain
cases where no amount of compensation or any other legal remedy can help mitigate losses of the
suffering party, the party can seek relief through the performance of certain specific obligations that
were undertaken in the original agreement that was made between the parties. In India, The Specific
Relief Act, 1963 along with other provisions in the Indian judiciary system contains the laws for such
contractual enforcement.

When an exchange of goods and/or services takes place investors and businessmen make use of
contracts. Contracts form the base of any transaction of goods and /or services and the enforcement of
such contracts is what ensures that contractual obligations are respected and rightfully executed by
both the parties that have entered into such a contract.

Enforcement of contracts in India:

I. There are many aspects to take into consideration as far as the enforcement of contracts in
India is concerned. Below we have mentioned some of the methods as well as conditions
where we see how and when enforcement laws are used efficiently:

A. Mandatory Specific performance of the Contracts:

Under the Principal Act, the court could grant specific performance relief at its discretion in
certain rare circumstances, such as when there was no criterion for determining genuine
damage caused by the contract's non-performance or where monetary compensation would
not provide enough remedy. The Amendment Act, on the other hand, has taken away the
courts' discretion, requiring them to enforce particular performance of a contract unless the
contract cannot be expressly enforced under the Amendment Act's provisions. This is a
significant shift in how executed contracts are enforced, with the goal of providing certainty
to contract parties' performance. The courts' track record of granting relief for specific
performance of contracts was unsatisfactory for a variety of reasons, including the discretion
granted to them, which has now been abolished in order to ensure proper contract
performance.

B. Contracts not specifically enforceable:

Certain contracts were not specifically enforceable under Section 14 of the Principal Act. The
amendment legislation has replaced this section with several additional exclusions that are
substantially comparable to the former section 14 of the Principal Act. However, the previous
exclusion for contracts that were not specifically enforceable “for the non-performance of
which compensation is an adequate relief” has been removed, and contracts can now be
specifically enforced even if adequate relief is a possibility, as long as they do not fall under
the exclusions. As a result, specific performance cannot be obtained for the following types
of contracts:

(a) a contract for which a party has obtained substituted performance under Section 20 of the
Act;

(b) a contract for which the performance involves the performance of a continuous duty that
the court cannot supervise;

(c) a contract that is so reliant on the parties' personal qualifications that the court is unable to
compel explicit performance of its material elements; and

(d) a contract that is determinable by its very nature.

C. Substituted Performance:

The newly replaced Section 20 of the Principal Act allows an aggrieved party to seek
"substituted performance" from a third party or through its own agency. Furthermore, while
using the substituted performance' remedy precludes an aggrieved party from seeking
particular performance, it does not preclude the aggrieved party from seeking damages for
breach of contract.

D. Timeline for disposal of suits:

Another important feature included by the Amendment Act is the deadline for resolving
lawsuits filed under the Act. It stipulates that a lawsuit must be resolved within twelve
months of the date of serving of the summons on the defendant, with a maximum extension
of six months. However, while granting such an extension, the court is compelled to put
down the reasons.

E. Injunctions and Special Courts:

The Amendment Act includes Section 20A, which limits the court's ability to grant
injunctions in contracts involving "infrastructural projects" as defined in the Schedule if
doing so will cause a delay in the progress or completion of such "infrastructure project." In
Section 41 of the Principal Act, a similar exclusion has been included. Section 20B of the
Amendment Act mandates that the State Government designate one or more civil courts as
special courts within the local limits of the region to exercise jurisdiction and try cases
brought under the Act in connection with infrastructure contracts.

F. Engagement of experts:

The Amendment Act adds a new provision for hiring technical experts in cases where the
court believes it is important to obtain an expert opinion on a specific problem in the case.
The terms of payment of such experts will be determined by the courts, and the payment will
be borne by the parties to the matter in the proportion and at the time that the court directs.

G. Recognition to Limited Liability Partnerships:

The Amendment Act introduced limited liability partnerships to the list of parties who can
demand specific performance by adding sub-section (fa) to Section 15 of the Principal Act.

II. Importance of the enforcement of contracts in India:

The following table represents India’s position in the Reports:

*Time is calculated in days taken to resolve the dispute.

While India has consistently improved its ranking in the Ease of Doing Business, its ranking
in enforcing contracts has not improved and has remained unchanged for several years. This
means that any progress India has made to make it easier to enforce contracts in the country
has either been so minor or ineffectual that it has failed to achieve the desired outcome, or
there has been no progress at all.

In-fact in the year 2020, the Report analysed the ease of enforcing contracts in India in the
cities of Mumbai and Delhi. The quality of judicial processes was marked 10.5 out of an
index of 0 to 18 .

In the four categories under the ease of enforcing contracts, India has got the following
scores:

 Alternative Dispute Resolution: 2.5/3

 Case Management: 1.5/6
 Court Automation: 2/6
 Court Structure and Proceedings: 4.5/5

III. Indemnity:

The scope of indemnity under section 124 is limited in comparison to English law. In the
event of an event or accident, the latter also allows a party to be legally reimbursed.
However, the scope of indemnity under the Indian Contract Act is limited to damage caused
by human behaviour. Furthermore, while various legal decisions have concluded that
indemnity can be both express and implied, section 124 does not expressly contain an
inferred indemnification.

The following are the essential elements of an indemnity contract, according to this section:

a) There must be two parties: the indemnifier and the indemnified;

b) a promise by the indemnifier to save the indemnified party from loss;

c) a promise by the indemnifier to save the indemnified party from liability;

d) a promise by the indemnifier to save the indemnified party from liability;

e) and the damage sustained by the indemnified party must be due to the indemnifier's or a
third party's actions.

The Indian Contract Act however, does not specifically grant any rights to an indemnifying
party. The parties involved must be aware of the practical implications of the clause and
should not develop high expectations from merely the theoretical benefits that it calls for.