A contract is a written or oral agreement which is legally enforceable entered into for a particular purpose by two or more parties where each party assumes a legal obligation that must be fulfilled. reiterated that when a plaintiff wants to implead certain persons as defendants in a suit for specific performance on the ground that they may be adversely affected by the outcome of the suit, then interest of justice also requires allowing such a prayer for impleadment so that the persons likely to be affected are aware of the proceedings and may take appropriate defence as suited to their vendors. (See Here), In 2017, the Kerala High Court held that a plaintiff is entitled to specific performance of a contract only if he sticks to the original terms of the contract. Where it compels the defendant to maintain a relationship with the plaintiff: A court will not make an order for specific perform… In this case (Airport Industrial GP Ltd & another v Heathrow Airport Ltd & another [2015] EWHC 3753 (Ch)), the court made an order for specific performance of a contractual obligation to carry out building works in relation to leasehold property. SPECIFIC PERFORMANCE UNDER CONTRACT LAW. Specific performance is a primary remedy for breach of contract available for the aggrieved party. The purpose for which a contract is entered into must be legal otherwise the contract would be void. Due to wide discretionary powers, a court often awards damages generally and award specific performance as an exception. (See Here), One of the reasons the court orders specific performance is because in some contracts damages cannot be remedied by money or where the true amount of damages is not clear. Performance of the contract involving some hardship on the Defendant which he did not foresee while non-performance involving no such hardship on the Plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. Specific performance is a very complex area of law, and there are many circumstances which prevent the court from making such an order, including: 1. The subject matter of the contract in question is unique, that there is no market substitute, or. In addition to giving persuasive reasons for doing so, the decision in Hera Project Pty Ltd v Bisognin & Anor [2016] VSC 591 more This site is protected by reCAPTCHA and the Google Specific performance of a contract is a remedy which is ordered by the court on case to case basis. Picture this. Such activities are in the sectors of transportation, energy, water & sanitation, communication and social & commercial infrastructure. The latter remedy is specific performance. Specific performance is the most accurate method of achieving the compensation goal of contract remedies because it gives the promisee the precise performance that he purchased. 31087 of 2014] reiterated that when a plaintiff wants to implead certain persons as defendants in a suit for specific performance on the ground that they may be adversely affected by the outcome of the suit, then interest of justice also requires allowing such a prayer for impleadment so that the persons likely to be affected are aware of the proceedings and may take appropriate defence as suited to their vendors. Specific performance means enforcement of exact terms of the contract. Contracts cannot be specifically enforced for personal services nor can it be enforced on an illegal contract, an ambiguous contract or a contract where there is an inadequate consideration. Specific performance is equitable relief, given by the court to enforce against a defendant, the duty of doing what he agreed by contract to do. (See Here). That damages would be financially ineffective (however, even if damages may not provide complete compensation for this reason, the court might still consider damages to be an adequate remedy). When there is no standard for ascertaining the actual damages for non-performance of an obligation given in the contract; Non-performance of an obligation of a contract cannot be compensated with money. WHAT IS SPECIFIC PERFORMANCE OF A CONTRACT? Already a member? Specific performance is a discretionary order made by a court wherein a party to a contract must perform a specific action as outlined in an existent contract. Specific performance may be … Is applying for an order for specific performance right for my situation? (See Here), Parties to a contract must perform their contractual obligations otherwise they can be sued for non-performance. © Copyright 2016, All Rights Reserved. Specific performance is a discretionary order made by a court wherein a party to a contract must perform a specific action as outlined in an existent contract. Another issue arose whether, in absence of permission granted by the trial court at the time of withdrawing the previous suit in which permanent injunction was claimed, the plaintiff can file a fresh suit where specific performance will be claimed. If there has been any delay in seeking the order. Specific performance Primary tabs A contractual remedy in which the court orders a party to actually perform its promise as closely as possible, because monetary … Interestingly, this appears to be the first authority that suggests that the court may, before the time for performance of a contractual obligation, order specific performance requiring the defendant in a case to take steps to achieve the prescribed result. The acceptance would mean that the other party is well versed with the rules and regulations of the offer. Specific performance is almost never available for contracts of personal service, although performance may also be ensured through the threat of proceedings for contempt of court. Due to wide discretionary powers, a court often awards damages generally and award specific performance as an exception. It depends on court’s complete discretion which should not be arbitrary but based on sound and reasonable ground. Although the court could not order the leaseholder to provide the car park ahead of the required date, it did require them to take certain steps (for example, applying for planning permission) to ensure that the car park could be completed as soon as possible. The non-breaching party (plaintiff) – is ready, willing, and able to perform.This means the plaintiff is prepared to carry out its obligations under the contract. Acceptance can be made in writing or orally. Specific performance is a type of remedy in contract law which is discretionary in nature – in other words, it’s up to the court to use their discretion as to whether making an order for specific performance is appropriate in the circumstances. What if they don’t meet their first deadline? Courts will also, generally, not grant specific performance in relation to a contract for personal services (such as employment contracts), because such an order would restrict an individual’s freedom. Whether the contract lacks adequate consideration. The most common example of such contract is a contract for a sale of property, for instance, mere monetary damages may not remedy the purchaser’s situation. We understand that contractual remedies can be a technically complex minefield, which is why we have a highly skilled team of business dispute lawyers on hand to help with providing you with the right advice and support if you need further guidance. (See Here). What is Specific Performance as ‘legal remedy’? Here, we explain what is meant by specific performance, how it could apply to your circumstances, and how, even despite the other party not meeting their part of the contract, you may still be able to move things forward. Whether any third-party rights would be affected. The interest must be such that compensation in terms of money for non-performance of the contract is not an adequate relief; Defendant has the possession of the land in which the building is to be constructed or other work is to be executed. The court may in some cases order specific performance in the form of replevin. Another clarification is to be made is that a party by acquiring substituted execution relinquishes his entitlement to get specific performance through court. 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 original contract; 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; Any person claiming under a title which, though prior to the contract and known to the plaintiff might have been displaced by the defendant. The other features of this Bill are as follows:- (See. Before an equity court will compel specific performance, however, the contract Those are as follows:-, Section 10 of the Specific Relief Act, 1963 states that a court may order specific performance of a contract under the following circumstances:-, Section 14(3) of Specific Relief Act, 1963 provides for those contracts which can be specifically enforced by a court:-. The court also observed that the necessary parties in a suit for specific performance of a contract for sale are not only parties to the contract or their legal representatives, but also a person who had purchased the contracted property from the vendor. If there is any variation in the terms of the contract even if it for the benefit of the defendant, the plaintiff will not be entitled to seek specific performance. According to Section 11 of Indian Contract Act, 1872, parties must-, This element specifies that all parties to the contract have to perform all their obligations. Special courts for infrastructure projects. | Powered by. The elements of a valid contract are as follows:-(See Here). AGAINST WHOM CAN SPECIFIC PERFORMANCE BE ENFORCED? In this article, Sanjana Tripathy discusses the specific performance of a contract and what contracts can be specifically enforced. Confidentiality & Non-Disclosure Agreements. 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. Legal action brought into a court compelling a party to carry out the terms of a contract. The existence of a valid and enforceable contract – If the contract is invalid or unenforceable for some reason, specific performance will not be available as a remedy. The other features of this Bill are as follows:- (See Here). In 2015, the High Court issued a decision which may be supportive to businesses seeking to enforce compliance with contractual obligations before there has been an actual breach of contract. A contract is a written or oral agreement which is legally enforceable entered into for a particular purpose by two or more parties where each party assumes a legal obligation that must be fulfilled. The Victorian Supreme Court has recently refused to grant an interlocutory injunction that would have had the effect of requiring specific performance of a contract. Section 10 of Indian Contract Act, 1872 states that an agreement becomes a contract if it is entered into with the free consent of parties, for a lawful consideration, for a lawful object and is not void. Specific per… Specific performance of a contract. The parties must be legally capable of entering into a contract. Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally. On the other hand, the cause of action to file a suit for claiming specific performance arises from the date fixed for the performance or when the plaintiff has noticed the non-performance of the defendant. If there is any variation in the terms of the contract even if it for the benefit of the defendant, the plaintiff will not be entitled to seek specific performance. Call us on 0800 048 4758, email us at enquiries@hjsolicitors.co.uk, or fill out our contact form and we’ll get back to you within 24 hours. you are the claimant). Anandibai Rama @ Rajaram Pawar & Ors. Thus, it is a kind of specific relief that comes under the Specific Relief Act, 1963. Terms of Service apply. This field is for validation purposes and should be left unchanged. Don’t hesitate to reach out and benefit from our expertise today. Are you still entitled to damages if you obtain an order for specific performance? Whether you are prepared to perform your side of the contract, if you’re the one making the claim (i.e. We use cookies to ensure that we give you the best experience on our website. According to Section 10 of Specific Relief Act 1963 in the following conditions specific performance of the contract is enforceable: … A party affected by the breach of contract has a choice to get the contract performed by an outsider, or by its own particular organization, at the cost of the contracting default party. (See Here), IN 2018, the Supreme Court in Sucha Singh Sodhi v. Baldev Raj Walia (Civil Appeal No. Specific performance is an equitable remedy that can be awarded for breach of contract, requiring the party to perform their obligations under the contract.1 The general principle is that specific performance will only be awarded where damages would not offer a suitable remedy to the claimant.2 This has been deemed by the courts to include circumstances where the loss incurred is not possible to quantify;3 where only nominal damages can be claimed;4 or where the contract relates to unique goods that cann… Specific performance is equitable relief provided by the court to impose the duty of doing what he agreed to try and do by contract against a defendant. WHEN CAN A COURT ENFORCE SPECIFIC PERFORMANCE AND WHAT CONTRACTS ARE SPECIFICALLY ENFORCED? To access legal support from just £99 per hour arrange your free no-obligation initial consultation to discuss your business requirements. For a liquidated damage clause to be enforceable, an amount must be set forth having a relationship with the actual damages as estimated by the parties otherwise the court will treat the amount as a penalty for failure to perform the contract. You’ve just signed a commercial contract that will partner your business with a new supplier, helping you to scale your offering, meet your forecasted targets and even potentially meet your stretch targets. Nirmala Bala Dasi and Anr. Specific performance and temporary/permanent injunction cannot be claimed in one suit as they are independent of each other. Specific performance and building contracts Specific performance, or specific implement as it is known in Scotland, is a mandatory order from a court requiring a contract to be performed. Therefore, the remedy of specific performance compares with the remedy by way of negligence for breach of contract, which provides pecuniary compensation for failure to fulfil the contract terms. Examples of when the court has ordered specific performance. Those are as follows:-, Section 19 of the Specific Relief Act, 1963, provides for those persons against whom specific performance can be enforced.  3777 of 2018), held that specific performance and permanent/temporary injunction cannot be claimed in one suit. Specific performance can be granted only by a court in the exercise of its EQUITY powers, subsequent to a determination of whether a valid contract that can be enforced exists and an evaluation of the relief sought. It is typically available in the sale of land law, but otherwise is not generally available if damages are an appropriate alternative. The court’s jurisdiction can only be attracted if the breach in a real estate contract is such that it cannot be compensated by money. '5 Three Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. Time limit of 12 months for disposal of a case. 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