The law relating to specific performance as engrafted in the Specific Relief
Act, 1963 ("the Act") is an extremely important facet of civil law. The Act
inter alia covers most aspects pertaining to performance of contracts as also
injunctive reliefs which can be granted and claimed.
This project shall acquaint and take us through the basic principles and
important aspects to be borne in mind while seeking specific performance of
contracts in relation to immoveable property and related aspects.
In respect of moveable property, the general rule is that specific relief is
refused as there is a presumption that the failure to perform can be compensated
in terms of money in view of Section 10 of the Act as unamended. Even though
Section 10 of the Act now stands amended, it does not mean that specific
performance for moveable's will be ordinarily granted.
The law will still
provide and presume that breach of a contract in respect of moveable's can be
compensated and therefore refuse performance. The exception to this will be
amongst others when the moveable 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.
- Assignment: When a party transfers his rights and interest in the contract tb
another person, he is said to assign the contract
- Breach: When a contracting party refuses to perform his obligation, there is a
breach of contract.
- Contribution: When a joint promissor has performed the whole of the promise, he
may claim the share from other joint promisors. This is known as contribution.
- Joint promisors: When a promise is made by two or more persons, they are known
as joint promisors.
- Novation: When a new contract is substituted for an existing one either between
the same parties or new parties, it is termed novation.
- Period of Limitation: A time laid down in the Law of Limitation for various
contracts. If it is not performed during this period, the performance becomes
- Reciprocal promise: A promise made in consideration of other party's promise is
- Remission: Acceptance of lesser performance than what was contracted for is
known as remission.
- Rescission: When one or all the terms of a contract are cancelled, it is termed
- Tender: An offer to perform a promise.
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
fail 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
Order of specific performance are granted when damages are not an
adequate remedy, and in some specific cases such as land sale. Such orders are
discretionary, as with all equitable remedies, 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
those damages will be inadequate compensation. Specific performance is deemed an
extraordinary remedy, awarded at the court's discretion.
Types Of Performance
In this case, the promisor actually performs the said promises which he is
obligated to do under the contract. On performing a contract in this manner the
contract is discharged and the promisor's liability towards the contract ceases
to exist. Actual Performance of the contract can be further divided into Partial
and Substantial Performance of Contract.
In the partial performance of the contract, the promisor or promisee has
performed their respective obligations but has not performed it completely.
Partial Performance of the contract may be due to non-willingness to perform or
due to certain unforeseen circumstances. The essential part of such a contract
is that the other party should show a willingness to accept the partly performed
In this type of performance, the main essence of the contract is almost
fulfilled. Substantial performance is applicable only if the contract is not an
entire contract and is severable. The rationale behind creating the doctrine of
substantial performance is to avoid the possibility of one party evading his
liabilities by claiming that the contract has not been completely performed.
However, what is deemed to be substantial performance is a question of fact to
be decided according to the circumstances.
When the performance has become due, it is sometimes sufficient if the promisor
offers to perform his obligation under the contract. This offer is known as
attempted performance or more commonly as tender. Thus, tender is an offer of
performance, which of course, complies with the terms of the contract.
are tendered by the seller but refused by the buyer, the seller is discharged
from further liability, given that the goods are in accordance with the contract
as to quantity and quality, and he may sue the buyer for breach of the contract
if he so desires. The rationale is that when a person offers to perform, he is
ready, willing, and capable to perform. Accordingly, a tender of performance may
operate as a substitute for the actual performance and can affect a complete
Essentials Of A Valid Tender
It is necessary that the tender must be valid. For a tender to be valid, the
following conditions must be satisfied:
- It must be unconditional: An unconditional tender is one which is in
accordance with the terms of the contract. Thus, a conditional offer of
performance is not a good tender and the other party is entitled to reject
it. For example, A, a debtor, offered to pay B, his creditor, the amount due
to him if B sells certain goods to him. It is a conditional tender and.
- It must be made at a proper time and place: Generally, the time and
place of performance are agreed upon, by the parties and the tender must be
made accordingly. Thus, a tender of good alter the business hours or of
goods or money before the due date is not a valid tender. For example, if
wants to deliver the goods at I a.m., this is not a valid tender unless it was
- In case of tender of goods, it must give a reasonable opportunity to the promisee of ascertaining that the goods offered are the same as the promisor is
bound to deliver. Thus, a tender of goods at such time when the other party
cannot inspect the goods, is not a valid tender.
- It must be for the whole obligation: A piecemeal tender of goods or to
pay the amount in instalments is not a valid tender. For example. A promises to
deliver 100 bags of rice on a certain day. If all the agreed day and place A
offers to deliver RO bags only. This is not a valid tender and A is not
dichargcd from his obligation. However, a minor deviation from the terms of the
contract may not render the tender invalid.
- It must be made to the promisee or his duly authorized agent: Thus, a tender
to a stranger is not valid. In case there are joint promisees, it is not
necessary for the promisor to offer performance to each one of them. A tender
may be made to any one of the joint promisees. Thus, a tender made to one of
several joint promisees has the same legal effects as a tender to all of' them.
- In case of payment of money, tender must be of the exact amount due and
it must be in the legal tender. It should not be in any other form such as
foreign currency or cheque. A payment by cheque is a valid tender provided the person to
whom it is made is ready and willing to accept it.
Time And Place For Performance
It is for the parties to a contract to decide the time and place for the
performance of the contract. The rules regarding the time and place of
performance are given in sections 46 to 50 of the Contract Act. These are as
- Performance of a promise within a reasonable time :
section 46 where the time for performance is not specified in the contract, and
the promisor himself has to perform the promise without being asked for by the
promisee, the contract must be performed within a reasonable time. The question
'what is a reasonable time' is, in each particular case, a question of fact.
Thus, it is clear from this provision that if time for performance is not
stated, the contract is not bad for want of certainty.
- Performance of promise where time is specified :
Sometimes, the time
for performance is specified in the contract and the promisor has undertaken to
perform it without any application or request by the promisee. In such cases,
the promisor must perform his promise on that particular day during the usual
hours of business and at place where the promise ought to be performed.
- Performance of promise on an application by the Promisee :
It may also
happen that the day for the performance of the promise is specified in the
contract but the promisor has not undertaken to perform it without application
or demand & by the promisee. In such cases, the promisee must apply for
performance at a proper place and within the usual hours of business.
- Performance of promise where no place is specified and also no
application is to be made by promisee :
When a promise is to be- performed
without application or demand by the promisee, and no place is specified for
performance, then it is the duty of the promisor to apply or ask the promisee to
fix a reasonable place for the performance of the promise and to perform it at
- Performance of promise in the manner and time prescribed or
sanctioned by promisee:
Sometimes the promisee himself prescribes the manner and the time
of performance. In such cases, the promise must be performed in the manner and
at the time prescribed by the promisee. The promisor shall be discharged from
his liability if he performs the promise in-the manner and time prescribed by
Performance Of Reciprocal Promises
When parties to an agreement make mutual promises to do or to abstain from doing
something, they are known as 'reciprocal promises'. Section 2(f) of the Contract
Act defines a reciprocal promise as promises which form the consideration or of
the consideration for each other. In such cases there is an obligation on each
party to perform his own promise and to accept performance of the others'
Types of Reciprocal Promises:
Reciprocal promises have been classified in the following three categories:
Order of Performance of Reciprocal Promises
- Mutual and independent:
When each party must perform his part of the
promise independently without waiting for the performance or readiness to
performance by the other party, the promises are called mutual and independent.
- Conditional and dependent:
When the performance of one party depends on the
prior performance of the other party, the promises are called conditional and
- Mutual and concurrent:
When the parties have to perform their promises
simultaneously, they are said to be mutual and concurrent.
Sometimes a problem arises, with regard to the order in which reciprocal
promises are to be performed. Contract Act provides that where the order in
which reciprocal promises are to be performed is expressly fixed by the
contract, they must be performed in that order; and where the order is not
expressly fixed by the contract, they shall be performed in that order which the
nature of the transaction requires.
Effects of Preventing the Performance of Reciprocal Promises
Sometimes it may so happen that one party to a reciprocal promise prevents the
other from performing his promise, In such a situation, the contract becomes
voidable at the option of the party so prevented, and he is also entitled to
claim compensation from the other party for any loss suffered due to
non-performance of' the contract.
Appropriation Of Payment
The term 'appropriation of payment' means the application of payment. When a
debtor owes several distinct debts to one creditor and makes a payment to the
creditor which is insufficient to discharge all the debts, a problem may arise
as to which particular debt, should the payment be applied. In some cases the
debtor may himself expressly point out to which particular debt the payment be
applied, while in others the circumstances may indicate the debt to which the
payment is to be applied. But the difficulty arises when neither there an
express indicating nor can it be implied from circumstances. In India, the rules
regarding appropriation of payments are given in sections 59 to 61. These rules
are as following:
- Where there is an express or implied intimation by the debtor:
debtor has the right to instruct his creditor to which particular debt the
payment is to be applied. If the creditor accepts the payment, he is duty bound
to follow the instructions. If the debtor expressly informs the creditor while
making payment that the payment be applied to a particular debt, the creditor
must do so. But if there is no express intimation by the debt then the intention
should be seen from the circumstances of the case.
- Where there is no express or implied intimation:
If, while making the
payment, the debtor does not intimate and there are no circumstances indicating
to which debt the payment is to be applied, then the creditor has the option to
apply the payment to any lawful debt due from the debtor. The amount, in such a
case, can be applied even too a debt which has become time-barred. However, it
cannot be applied to a disputed debt. But, once an appropriation has been made
by the creditor and the debtor is informed, the creditor cannot change his
option later on.
- Where neither party appropriates:
Where neither the debtor nor the
creditor makes any appropriation, the payment shall be applied in discharge of
the debts in order of time, whether or not they are time-barred. If the debts
are of equal standing, the payment shall be applied in discharge of each
proportionately. It should be noted that where moneys are received by the
creditor without any definite appropriation on either side, the money so
received must first be applied in payment of interest and then in payment of
Specific Performance Of Contract Enforceable.
Under the following conditions specific performance of the contract is
When there exist no standard for ascertaining actual damage:
It is the situation in which the plaintiff is unable to determine the amount of
loss suffered by him. Where the damage caused by the breach of contract is
ascertainable then the remedy of specific performance is not available to the
plaintiff. For example, a person enters into a contract for the purchase of a
painting of dead painter which is only one in the market and its value is
unascertainable then he is entitled to the same.
When compensation of money is not adequate relief:
In following cases compensation of money would not provide adequate relief:
- Where the subject matter of the contract is an immovable property.
- Where the subject matter of the contract is movable property and,
- Such property or goods are not an ordinary article of commerce i.e.
which could be sold or purchased in the market.
- The article is of special value or interest to the plaintiff.
- The article is of such nature that is not easily available in the
- The property or goods held by the defendant as an agent or trustee of
In Case of Ram Karan v. Govind Lal
, an agreement for sale of agricultural
land was made & buyer had paid full sale consideration to the seller, but the
seller refuses to execute sale deed as per the agreement. The buyer brought an
action for the specific performance of contract and it was held by the court
that the compensation of money would not afford adequate relief and seller was
directed to execute sale deed in favour of buyer.
Similarly, it was held by the court where the part payment was paid by plaintiff
and defendant admitted that he had handed over all documents of title of
property to the plaintiff. Sale price in an agreement is not low and defendant
had failed to establish that said document was only a loan transaction then the
agreement is valid and defendant is liable to perform his part (M. Ramalingam v.
Specific Performance Of Contracts Connected With Trusts Enforceable.
- specific performance of a contract may, in the discretion of the court,
be enforced when the act agreed to be done is in the performance wholly or
partly of a trust.
- A contract made by a trustee in excess of his powers or in breach of
trust cannot be specifically enforced.
Specific Performance Of Part Of Contract.
The court shall not direct the specific performance of a part of a contract.
- Where a party to a contract is unable to perform the whole of his part
of it, but the part which must be left unperformed be a only a small
proportion to the whole in value and admits of compensation in money, 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.
- Where a party to a contract is unable to perform the whole of his part
of it, and the part which must be left unperformed either:
- forms a considerable part of the whole, though admitting of compensation
in money; or
- does not admit of compensation in money; he is not entitled to obtain a
decree for specific performance; but the court may, at the suit of the other
party, direct the party in default to perform specifically so much of his
part of the contract as he can perform, if the other party;
- in a case falling under clause:
- pays or has paid the agreed consideration for the whole of the contract
reduced by the consideration for the part which must be left unperformed
and, in a case, falling under clause
- [pays or has paid] the consideration for the whole of the contract
without any abatement; and
- in either case, relinquishes all claims to the performance of the
remaining part of the contract and all right to compensation, either for the
deficiency or for the loss or damage sustained by him through the default of
- When a part of a contract which, taken by itself, can and ought to be
specifically performed, stands on a separate and independent footing from
another part of the same contract which cannot or ought not to be
specifically performed the court may direct specific performance of the
A party to a contract shall be deemed to be unable to perform the whole of his
part of it if a portion of its subject-matter existing at the date of the
contract has ceased to exist at the time of its performance.
Rights Of Purchaser Or Lessee Against Person With No Title Or Imperfect Title.
- Where a person contracts to sell or let certain immovable property
having no title or only an imperfect title, the purchaser or lessee has the
following rights, namely:
- if the vendor or lessor has subsequently to the contract acquired any
interest in the property, the purchaser or lessee may compel him to make good
the contract out of such interest.
- where the concurrence of other person is necessary for validating the
title, and they are bound to concur at the request of the vendor or lessor, the
purchaser or lessee may compel him to procure such concurrence, and when a
conveyance by other persons is necessary to validate the title and they are
bound to convey at the request of the vendor or lessor, the purchaser or lessee
may compel him to procure such conveyance.
- where the vendor professes to sell unencumbered property, but the
property is mortgaged for an amount not exceeding the purchase money and the
vendor has in fact only a right to redeem it, the purchaser may compel him
to redeem the mortgage and to obtain a valid discharge, and, where
necessary, also a conveyance from the mortgagee.
- where the vendor or lessor sues for specific performance of the contract and
the suit is dismissed on the ground of his want of title or imperfect title, the
defendant has a right to a return of his deposit, if any, with interest thereon,
to his costs of the suit, and to a lien for such deposit, interest and costs on
the interest, if any, of the vendor or lesser in the property which is the
subject-matter of the contract.
The provisions shall also apply, as far as may be, to contracts for the sale or
hire of movable property.
Contracts Not Specifically Enforceable.
- The following contracts cannot be specifically enforced, namely:
- a contract for the non-performance of which compensation in money is an
- a contract which runs into such minute or numerous details or which is
so dependent on the personal qualification or volition of the parties, or
otherwise from its nature is such, that the court cannot enforce specific
performance of its material terms;
- a contract which is in its nature determinable.
- a contract the performance of which involves the performance of a
continuous duty which the court cannot supervise.
- No contract to refer present or future differences to arbitration shall
be specifically enforced; but if any person who has made such a contract
(other than an arbitration agreement to which the provisions of the said act
apply) and has refused to perform it, sues in respect of any subject which
he has contracted to refer, the existence of such contract shall bar the
- The court may enforce specific performance in the following cases:
- where the suit is for the enforcement of a contract,
- to execute a mortgage or furnish any other security for securing the
repayment of any loan which the borrower is not willing to repay at once: or
- to take up and pay for any debentures of a company.
- where the suit is for,
- the execution of a formal deed of partnership, the parties having
commenced to carry on the business of the partnership; or
- the purchase of a share of a partner in a firm;
- where the suit is for the enforcement of a contract for the construction
of any building or the execution of any other work on land: Provided that
the following conditions are fulfilled, namely:
- the building or other work is described in the contract in terms
sufficiently precise to enable the court to determine the exact nature of
the building or 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
non-performance of the contract is not an adequate relief; and
- the defendant has, in pursuance of the contract, obtained possession of
the whole or any part of the land on which the building is to be constructed
or other work is to be executed.
Who Can Obtain Specific Performance
Section 15 of the Specific Relief Act, 1963 provides for those persons who
can obtain specific performance of a contract. Those are as follows:
- Any party to a suit.
- Representative in interest or principal of any party thereto.
- If a contract is a settlement of marriage or a compromise of
doubtful rights between members of the same family, any beneficiary
- If a tenant enters into a contract for life in due exercise of a
power, the remainderman.
- A reversioner in possession, if an agreement is a covenant entered into
with his predecessor in title and the reversioner is entitled to the benefit of
- A reversioner in remainder, if an agreement is a covenant and the
reversioner is entitled to the benefit and will sustain material injury if there
is a breach of contract.
- If a company has entered into an amalgamation with another company
through a contract, the new company which arises out of such
- If the promoters of a company entered into a contract before its
incorporation for purposes of the company and such contract is warranted
by the terms of the incorporation, the company provided that the company
accepted the contract and communicated such acceptance to the other
party of the contract.
Personal Bars To Relief.
Specific performance of a contract cannot be enforced in favour of a person:
- who would not be entitled to recover compensation for its breach; or
- who has become incapable of performing, or
- violates any essential term of the contract that on his part remains to
be performed, or
- acts in fraud of the contract, or
- willfully acts at variance with, or
- in subversion of the relation intended to be established by the
- who fails to aver and prove that he has performed or has always been
ready and willing to perform the essential terms of the contract which are
to be performed by him, other than terms of the performance of which has
been prevented or waived by the defendant.
- where a contract involves the payment of money, it is not essential for
the plaintiff to actually tender to the defendant or to deposit in court any
money except when so directed by the court;
- the plaintiff must aver performance of, or readiness and willingness to
perform, the contract according to its true construction.
Contract To Sell Or Let Property By One Who Has No Title, Not Specifically Enforceable.
- A contract to sell or let any immovable property cannot be specifically enforced
in favour of a vendor or lessor;
- who, knowing himself not to have any title to the property, has contracted
to sell or let the property;
- who, though he entered into the contract believing that he had a good
title to the property, cannot at the time fixed by the parties or by the
court for the completion of the sale or letting, give the purchaser or
lessee a title free from reasonable doubt.
- The provisions shall also apply, as far as may be, to contracts for the
sale or hire of movable property.
Non-Enforcement Except With Variation.
Where a plaintiff seeks specific performance of a contract in writing, to which
the defendant sets up a variation, the plaintiff cannot obtain the performance
sought, except with the variation so set up, in the following cases, namely:
- whereby fraud,
- mistake of fact or
- the written contract of which performance is sought is in its terms or
- effect different from what the parties agreed to, or
- does not contain all the terms agreed to between the parties on the
basis of which the defendant entered into the contact.
- where the object of the parties was to produce a certain legal result
which the contract as framed is not calculated to produce.
- where the parties have, subsequently to the execution of the contract,
varied its terms.
Relief Against Parties And Persons Claiming Under Them By Subsequent Title.
Specific performance of a contract may be enforced against:
- either party thereto.
- any other person claiming under him by a title arising subsequently to
the contract, except a transferee for value who has paid his money 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.
- when a company has entered into a contract and subsequently becomes
amalgamated with another company, the new company which arises out of the
- when the promoters of a company have, before its incorporation, entered
into a contract for the purpose of the company and such contract is
warranted by the terms of the incorporation, the company.
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract
One of the important aspects of civil right is the fulfillment of the
expectations created by a contract voluntarily made by the parties. Contract is
not just an isolated transaction. It is often a link in a chain of several
contracts. A failure at one place can cause a serious dislocation of economic
social life. The contract must be enforced. The only way the law of contract can
enforce a contract is by awarding compensation to the injured person or by
specifically enforcing the obligations under the contract.
The most natural way of terminating the contract is to perform it. The
performance may be either actual or attempted (also known as Tender). When a
party offers to perform his promise in accordance with the contract, and the
other party refuses to accept it, the contract is discharged. The tender to be
valid must be unconditional, made at the proper time, place and manner, made to
the promisee or his authorized agent, and must be for the whole obligation.
Performance can be demanded by the promisee only. In case of his death his
representatives can demand performance. In case of contracts of a personal
nature, they should be performed by the promisor. In other cases, it may be
performed by his agent, and in case of his death by his legal representatives.
When two or more persons make a joint promise, then unless a contrary intention
appears from the contract, all of them must perform jointly. If any one of the
joint, promisors dies, his legal representative shall be liable to perform along
with other joint promisors.
The contract should be performed at the time specified and at the place agreed
upon. If no time is specified the promisor must perform the promise within a
reasonable time. In case no time and place is fixed for the performance, the
promisee must ask the promisor to fix the day and time for performance. In
commercial agreements, time's the essence of the contract.
Promises which form the consideration or part of the consideration for each
other are termed as reciprocal promises. Reciprocal promises must be performed
in the order specified in the contract.
Assignment of a contract means transfer of rights and obligations under a
contract to third party. It may be done by the act of the party or by operation
of law. Rights and benefits under a contract can be duly assigned. But a
promisor cannot assign his liabilities. Contracts of a personal nature cannot be
Appropriation means applying the payment to a particular debt. If, while making
the payment, the debtor specifies the debt to which it should be applied, then
the creditor must appropriate the payment to that debt only. In case the debtor
does not specify the debt to which it should be applied, the amount can be
appropriated by the creditor in the manner he deems it fit.
Specific performance is a form of equitable relief, given by the court in case
of breach of contract, in the form of a judgment that the defendant does
actually perform the contract according to the terms and stipulations.
The specific performance of any contract may, in the discretion of the court, be
- When there exists no standard for ascertaining actual damage caused by the
non-performance of the act agreed to be done; or
- When the act agreed to be done is such that compensation in money for
its non-performance would not afford adequate relief.
Not all the contracts are specifically enforceable. These include the following:
- A contract for non-performance of which compensation in money is an
- A contract that runs into such minute details which is so dependent on
the personal qualification or violation of the parties or otherwise its
nature is such that the court cannot enforce specific performance of its
- A contract which is by its nature terminable.
- A contract, the performance of which involves a continuous duty, which
the Court cannot supervise.
The plaintiff must be entitled to any legal character or to any right as to any
property. The defendant should have denied or be interested in denying the
character or title of the plaintiff. It is this denial which gives a cause of
action for declaratory relief. And that the plaintiff is not in a position to
claim further relief than mere declaration of his title, or where he is so able
to seek further relief, he can seek such relief also.
- The Indian Contract Act, 1872 , Section 46
- The Indian Contract Act, 1872 , Section 47.
- The Indian Contract Act, 1872 , Section 48.
- The Indian Contract Act, 1872, Section 49.
- The Indian Contract Act, 1872, Section 50.
- The Indian Contract Act, 1872 , Section 52.
- The Indian Contract Act, 1872 , Section 59.
- The Indian Contract Act, 1872 , Section 60.
- The Indian Contract Act, 1872 , Section 61.
- The Specific Relief Act, 1963 – Chapter 3 - Section 10.
- A.I.R. 1999 Raj. 167
- A.I.R. 2003 Mad. 305
- The Specific Relief Act, 1963 – Chapter 3 - Section 11
- The Specific Relief Act, 1963 – Chapter 3 - Section 12.
- The Specific Relief Act, 1963 – Chapter 3 - Section 13.
- The Specific Relief Act, 1963 – Chapter 3 - Section 14.
- The Specific Relief Act, 1963 – Chapter 3 - Section 15.
- The Specific Relief Act, 1963 – Chapter 3 - Section 16.
- The Specific Relief Act, 1963 – Chapter 3 - Section 17.
- The Specific Relief Act, 1963 – Chapter 3 - Section 18.
- The Specific Relief Act, 1963 – Chapter 3 - Section 19.