Law On Specific Performance Of

Contract
Chapter II
 LAW ON SPECIFIC PERFORMANCE OF
CONTRACT
• Sections 9-25 deal with specific performance of contracts: Basic rules.
• A contract is an agreement upon sufficient consideration to do or not to do a
particular act. The party on whom this contractual obligation rests must not fails to
discharge such obligation. In case of his failure, the other party will have a right sue
for performance of the contract. This is called ‘Specific Performance’. The Specific
Relief (Amendment) Act, 2018, makes the relief for specific performance a
statutory remedy instead of an equitable discretionary remedy. Before the
Amendment, courts grant specific performance when they perceive that damages
will be inadequate compensation. Earlier, Specific performance is deemed an
extraordinary remedy, awarded at the court’s discretion. The Amendment Act,
2018 has dispensed with the settled grounds that specific performance can only be
granted when either the damage cannot be ascertained or when monetary
compensation is not adequate.
 Specific Performance of Contracts
• Specific performance means enforcement of
exact terms of the contract. Under it the
plaintiff claims for the specific thing of which
he is entitled as per the terms of contract. For
example, if A agrees to sell certain shares to B
of a specific company which are limited in
number and after the payment made by B, if A
refuses to sell the shares then B is entitled to
recovery of those shares
 Section 10 of the Specific Relief Act, 1963 substituted by
Section 10 introduced by Specific Relief (Amendment) Act, 2018

Section 10 of Specific Relief Act, 1963

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
 Section 10 of the Specific Relief Act, 1963 substituted by
Section 10 introduced by Specific Relief (Amendment) Act, 2018

Section 10 of Specific Relief Act, 1963

(b) when the act agreed to be done is such that compensation in money for its
non-performance would not afford adequate relief. Explanation—Unless and
until the contrary is proved, the court shall presume—
(i) that the breach of a contract to transfer immovable property cannot be
adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved
except in the following cases:—
(a) where the property is not an ordinary article of commerce, or is of special
value or interest to the plaintiff, or consists of goods which are not easily
obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the
plaintiff.
 Section 10 of the Specific Relief
(Amendment) Act, 2018
• Substitution of new section for section 10:
• For section 10 of the principal Act, the following section shall
be substituted, namely:—
Specific performance in respect of contracts:
“The specific performance of a contract shall be enforced by
the court subject to the provisions contained in sub-section
(2) of section 11, section 14 and section 16”
The Courts no longer have the discretion and must grant
specific performance unless expressly barred by the
provisions stated in the Specific Relief Act, 1963 (“Act”) i.e.
Sections 11(2), 14 and16.
 Contracts which cannot be specifically
enforced
• According to Section 14 (OLD) of Specific Relief Act 1963,
there are certain contracts which cannot be specifically
enforced and these are:

• Where compensation in money is an adequate relief:

Here the court will not order specific performance of
contract as it is expected that the plaintiff will bank upon
the normal remedy for breach of contract i.e. remedy of
compensation. For example contract of contract of sale
of goods ,contract of repair of premises etc.
 Old Section 14
• Where a contract runs into minutes or numerous detail:
These contracts includes contract which depends upon
the personal qualification or the violation of the parties or
is of such nature that the court cannot enforce specific
performance of its material terms. In Robinson Davison,
(1871) L.R. Ex. 269 it was held by the court that the
contract to perform in concert depends upon the personal
kill of defendant’s wife, and the contract cannot be
specifically enforced due to her illness. The other example
is construction contract where the detailed terms of
contract are not explained.
 Old Section 14
• Contracts of determinable nature: Determinable contract means a contract
which can be determined or revoked or put to an end by a party to the contract.
For example in case of partnership at will any partner can retire by giving notice in
writing to other partners and can dissolve the firm.
• Contracts which involve the performance of continuous duty which court
cannot supervise: Earlier under Specific Relief act, 1877 the continuous duty
which court cannot supervise is considered over a period of 3 years which was
omitted under Specific Relief Act, 1963 and no time limit restricted for the
performance of a continuous duty. These include contract of appointment of
employees for continuous service or contract to execute sale deed every year. In
Central Bank v. Vyankatesh, A.I.R. 1949 Nag 286, the defendant was required to
execute deed every year for the period of 25 years and contract is held to be
specifically unenforceable.
• Contract of arbitration: According to Section 14(2), a contract to refer present or
future differences to arbitration shall not be specifically enforceable.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
• Substitution of new section for section 10:
• For section 14 of the principal Act, the following section shall be
substituted, namely:—
Contracts not specifically enforceable:
The following contracts cannot be specifically enforced, namely:—
(a) where a party to the contract has obtained substituted performance of
contract in accordance with the provisions of section 20;
(b) a contract, the performance of which involves the performance of a
continuous duty which the court cannot supervise;
(c) a contract which is so dependent on the personal qualifications of the
parties that the court cannot enforce specific performance of its
material terms; and
(d) a contract which is in its nature determinable.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
• As per Section 14 (NEW)of the Amendment
Act, 2018 the following categories of contracts
cannot be specifically enforced:
1. where a party to the contract has obtained
substituted performance of contract in
accordance with the provisions of section 20-
Section 14 (a)
 Section 20 of the Specific Relief
(Amendment) Act, 2018
Substituted performance of contract
(1) Without prejudice to the generality of the provisions
contained in the Indian Contract Act, 1872, and, except as
otherwise agreed upon by the parties, where the
contract is broken due to non-performance of promise by
any party, the party who suffers by such breach shall
have the option of substituted performance through a
third party or by his own agency, and, recover the
expenses and other costs actually incurred, spent or
suffered by him, from the party committing such breach.
 Section 20 of the Specific Relief
(Amendment) Act, 2018
• Cont..
Substituted performance of contract:
(2) No substituted performance of contract under sub-
section (1) shall be undertaken unless the party who suffers
such breach has given a notice in writing, of not less than
thirty days, to the party in breach calling upon him to
perform the contract within such time as specified in the
notice, and on his refusal or failure to do so, he may get the
same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be
entitled to recover the expenses and costs under sub-section
 Section 20 of the Specific Relief
(Amendment) Act, 2018
(1) unless he has got the contract performed through
a third party or by his own agency. (3) Where the
party suffering breach of contract has got the
contract performed through a third party or by his
own agency after giving notice under sub-section (1),
he shall not be entitled to claim relief of specific
performance against the party in breach. (4) Nothing
in this section shall prevent the party who has
suffered breach of contract from claiming
compensation from the party in breach.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
2. a contract, the performance of which involves the
performance of a continuous duty which the court cannot
supervise - Section 14(b) [Example: Contract to build or Repair]
Joseph versus National Magazine Co Ltd. (1958) 3 ALL ER 52
A writer refused to have his name published as the author
which had been re-edited and altered by a magazine expressing
other opinions in a different style. He was not entitled to
specific performance of his contract as that would require
supervision by the court of editing the article though he would
be entitled to damages for loss of opportunity of enhancing his
reputation.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
• Cont..
2. a contract, the performance of which involves the
performance of a continuous duty which the court cannot
supervise - Section 14(b)
Example:- ‘A’ contracts to let for 21 years to ‘B’ the right to
use such part of a certain railway made by ‘A’ as was upon B’s
land and that B should have a right running carriages over the
whole line on certain terms and might require ‘A’ to supply
the necessary engine power and that ‘A’ should during the
term keep the whole railway in good repair specific
performance of this contract must be refused to ‘B’.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
3. a contract which is so dependent on the personal qualifications
of the parties that the court cannot enforce specific performance
of its material terms;- Section 14(c)
 Contracts of employment, contracts of personal service,
contracts involving performance of artistic skill like contract to
sing, act, contract of authorship.
• It is beyond the capacity of judicial process to enforce actual
performance.
• Example: Where A contracts to render personal service to B or
contracts to employ B on personal service or being an author
contracts with B , a publisher to complete a literary work, B
cannot enforce specific performance to these contracts.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
Cont..
3. a contract which is so dependent on the personal
qualifications of the parties that the court cannot enforce
specific performance of its material terms; and
• Example: The principle applies equally where the employer
seeks to enforce the contract. Even if a person has contracted
with another to perform a service and there is consideration for
such service in the shape of liquidation of debt or even
remuneration he cannot be forced by compulsion of law to
continue to perform such service as that would be forced labour
within inhibition of Article 23 of the Constitution of India.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
• forcing someone to perform a personal service
contract "would be but a mitigated form of
slavery, in which the party would have lost the
right to dispose of himself as a free agent, and
be ... subject to the control of another. Our
political system prefers not to interfere in the
lives of its citizenry in such a manner as to
inhibit personal liberty, so forced contract
performance is avoided whenever possible.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
• ("How do you make an opera singer sing her
best? You don't.").
• A contract to sing at B’s theatre for one year and
not to sing elsewhere. “To sing at B’s theatre for
one year” is a contract which depends upon the
personal qualifications or volition of the parties
and hence cannot be specifically enforced. But
the negative part of this contract that A will not
sing elsewere can be specifically enforced.
 Section 14 of the Specific Relief
(Amendment) Act, 2018
4. a contract which is in its nature determinable.
(Determinable Contracts)- Section 14 (d)

Example: Where A and B contract to become

partners in a certain business the contract not
specifying the duration of the proposed
partnership, the contract cannot be specifically
performed for if it were so performed either A or
B might at once dissolve the partnership.