INTRODUCTION
The Specific Relief Act was enacted on December 13, 1963, with the aim that when a party has withdrawn themselves from the performance of a specific contract or promise concerning another party, the aggrieved party is entitled to relief under the Specific Relief Act, 1963. This act is considered as a branch of the Indian Contracts Act, of 1872. The Specific Relief Act is a legal statute that deals with the relief or recovery of damages for the injured party. The remedy of specific performance enables the enforcement of a contract by a party who fails, neglects, or intentionally refuses to fulfil the contract, at the discretion of the court, safeguarding individual civil rights. In the situation of a breach of contract, the general remedy available to the aggrieved party is compensation or damages for the loss suffered.[1]
OVERVIEW: FORMATION OF CONTRACT
The contract is defined as an agreement between two parties which might be written or oral and it should be enforceable by law for a specific purpose. It denotes the obligations of the parties involved in the contract.
According to section 10 of the Indian Contract Act, of 1872 all agreements which parties form should be considered as a contract if they are made by free consent of parties, for a lawful consideration and with a lawful object, otherwise, it should be declared as a void.[2]
ESSENTIAL OF CONTRACT
- Agreement: An agreement is the prior stage for the formation of a contract, which includes offer, acceptance, and consideration.
- Free Consent: Consent is also important essential for the formation of the contract. The party to the contract should be free to consent and it should not be influenced by coercion, undue influence, misrepresentation, fraud and mistake.[3]
- Competency: Competency refers to the parties who are legally capable of forming a contract. According to Section 11 of the Indian Contract Act, parties entering into a contract must be of sound mind, have attained the age of majority, and not be disqualified from entering into a contract by any laws.[4]
- Lawful Object: A contract for which parties are forming contact for a specific purpose it should be lawful otherwise it should be declared void.[5]
SPECIFIC PERFORMANCE OF CONTRACT
Specific performance is a type of equitable relief. Before someone can ask for this, they have to show the court that just getting money as compensation wouldn’t fix the problem. In the past, whether the court granted specific performance was up to the judge’s decision. But in 2018, a major change was introduced by the Amendment to the Act. Now, if someone asks for a specific performance and proves they need it, the court has to give it to them[6].
SECTION 10: Section 10, which addresses cases in which the specific performance of a contract is enforceable, has been amended by the Specific Relief Act 2018, completely substituting the previous section. Initially, the court had discretionary power, but now it is mandated to grant specific performance. Specific performance of a contract shall be enforced by the court subject to the provisions contained in Section 11(2), Section 14, and Section 16.[7]
SECTION 11: Section 11 deals with cases in which the specific performance of a contract connected with a trust is enforceable. This section comprises two provisions
- Section 11(1) states that, except as otherwise provided in the act, specific performance of a contract shall be enforced when the act agreed to be done is in the performance, wholly or in part, of a trust. To create such a contract, there should be an author, trustee, and beneficiary involved. If the trustee fails to complete their given work, either the author or the beneficiary can file a case against the trustee for specific performance of the contract, thus making the trustee bound to do it.[8]
- In section 11(2), when a trustee creates a contract over his power or is in breach of his trust, then that cannot be specifically enforced because it serves as an exception to the general rule laid out in Section 10 of the Specific Relief Act.[9]
SECTION 12: Section 12 of the Specific Relief Act specifies the performance of part of a contract. The section contains four subsections. In section 12(1), the court generally does not direct specific performance. However, in sections 12(2), 12(3), and 12(4), the court can direct specific performance.
- Section 12(1) states that unless otherwise specified in this section, the court shall not direct the specific performance of a part of the contract[10]
- Section 12(2) states that if a party to the contract fails to perform a part of the contract, and the part they fail to perform is only a small part of the whole contract, then compensation will be awarded for that failure to perform that small part. In this case, a suit can be filed by both parties.[11]
- In Section 12(3), only one party can file a suit, which is the buyer. In this case, if one party to the contract fails to perform a part of the contract, and that part constitutes a considerable portion of the whole value then the promisor has two options. a) The promisor can admit compensation for the unperformed part. b) The promisor does not admit compensation for the unperformed part before the court. f the court becomes involved, and it is possible to perform a part of the contract, then the court may direct the promisor to do so. However, if it is beyond the control of the promisor to perform part of the contract, then the court cannot compel the seller to perform that specific part.[12]
- Section 12(4) can indeed be considered a silent section. It pertains to who can claim specific performance, especially in cases where the contract consists of independent parts. If there’s a contract where one part can and should be specifically performed, and it stands separately from another part of the same contract which cannot or should not be specifically performed, the court may direct the specific performance of the former part.[13]
SECTION 14: Section 10 of the act specifies that before granting specific performance to a party in a contract, Section 14 must be considered. This section outlines situations where a contract cannot be specifically enforced.
a) substituted performance: if the aggrieved party to the contract has arranged for another person to fulfil the contract, then specific performance cannot be enforced, following the provisions of Section 20.
b) Continuous duty: when the performance involves the performance continuous action, which the court cannot direct.
c) Personal characteristics: This provision refers to contracts that rely heavily on the specific skills, abilities, or characteristics of the individuals involved. If the court cannot ensure that the specific terms of the contract will be fulfilled due to the personal characteristics or abilities of the parties, then specific performance cannot be enforced.
d) Determinable nature: contracts that are determinable means they can end or be terminated under certain conditions, and cannot be specifically enforceable.[14]
SECTION16: Section 16 deals with personal bars to relief
a) Specific performance of a contract is favoured by a person who has obtained substituted performance of the contract under section 20.[15]
b) The court will refuse specific performance to a person if the person requesting it has created personal bars, such as becoming incapable of performing or violating essential terms of the contract, or if the person acts fraudulently, willfully acts in variance with, or subverts, the intended relation established by the contract.[16]
c) If someone cannot show that they’ve done what they were supposed to do in the contract, or if they haven’t always been ready and willing to do it, except for the things the other person stopped them from doing or agreed to let them skip, they won’t get what they’re asking for in court.[17]
CONCLUSION
The Specific Relief Act of 1963 provides a legal framework for obtaining relief or recovery of damages for injured parties. As an essential component of the Indian Contracts Act of 1872, the Specific Relief Act plays a crucial role in upholding contractual obligations and facilitating legal remedies for breach of contract.
A contract, governed by the Indian Contract Act of 1872, is a legally enforceable agreement between parties, involving offer, acceptance, consideration, legal object, and capacity to contract. For a contract to be valid, it must meet these essential elements, ensuring free consent, lawful consideration, lawful object, and the capacity of the parties involved. Adherence to these principles upholds the integrity and enforceability of contracts within the legal framework.
The Act offers remedies for breach of contract, it also outlines exceptions and limitations, ensuring fairness and equity in legal proceedings. The amendments introduced in 2018 have made the specific performance of contracts a mandatory remedy, emphasizing the importance of upholding contractual obligations and protecting the rights of aggrieved parties within the Indian legal system.
Author(s) Name: Ankush Dhoti (Savitribai Phule University, Pune (DES’s Shri Navalmal Firodia Law College Pune)
Reference(s):
[1] Khushi Sharma, ‘Specific Relief Act, 1963’ (ipleader,7 August 2023) <https://blog.ipleaders.in/introduction-to-the-specific-relief-act-1963/#Contracts_that_cannot_be_specifically_enforced> accessed 26 April 2024
[2] Indian Contract Act 1872, s 10
[3] ‘Contract’ (BUSINESS JARGONS) <https://businessjargons.com/contract.html> accessed 26 April 26, 2024
[4] Indian Contract Act 1872, s 10
[5] ‘Contract’ (BUSINESS JARGONS) <https://businessjargons.com/contract.html> accessed 26 April 2024
[6] ‘Specific Performance of Contracts’ (drishti judiciary , 13 October 2023) <https://www.drishtijudiciary.com/to-the-point/ttp-specific-relief-act/specific-performance-of-contracts-1> accessed 27 April 2024
[7] Specific Relief Act 1963, s 10
[8] Specific Relief Act 1963, s 11(1)
[9] Specific Relief Act 1963, s 11(2)
[10] Specific Relief Act 1963, s 12(1)
[11] Specific Relief Act 1963, s 12(2)
[12] Specific Relief Act 1963, s 12(3)
[13] Specific Relief Act 1963, s 12(4)
[14] Specific Relief Act 1963, s 14
[15] Specific Relief Act 1963, s 16(a)
[16] Specific Relief Act 1963, s 16(b)
[17] Specific Relief Act 1963, s 16(c)
