Contracts which are not specifically enforced

According to Indian Contract Act, 1872 the term “Contract” under its section 2 (h) is “An agreement enforceable by law”. An agreement is nothing, but an offer made and acceptance of the same. And to be a contract, the agreement must be legally enforced. So, an agreement must be legally bound or must give a rise to or lead to legal obligations. Thus, a contract is accepted proposal plus enforced by law. Whenever there is breach of contract, “the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it”. But many times, the plaintiff is not satisfied with the damages/compensation given to them and they want the act to be done instead of relief, hence THE SPECIFIC RELIEF Act comes to place.

This relief is provided by the non-performing party itself as the monetary compensation in the form of damages could not satisfy the other party in the contract.

There is a section where it is mentioned where the Specific Relief Act is not applicable that is S. 14 of the act. In S.14 has been replaced by the amendment act with some exclusions which are largely like the earlier section 14 of the principal Act.  Further, it must be noted that specific performance is a discretionary relief, and the Court may refuse to grant the specific performance of a contract even though such contract does not fall under S. 14.

  1. CONTRACTS WHERE COMPENSATION IS ADEQUATE RELIEF

If A and B enter a contract of selling books worth two thousand. Due to some reason A is unable to perform the contract and sell the books then the court will award a decree for compensation, as compensation is an adequate remedy, and the contract cannot claim the Specific Relief under this act.

  • A CONTRACT, THE PERFORMANCE OF WHICH INVOLVES THE

PERFORMANCE OF A CONTINUOUS DUTY WHICH THE COURT CANNOT SUPERVISE.

If Wand T enters a contract where  W will provide 24 hrs of water supply, any breach of contract will not be served in Specific Relief Act cause this thing needs continuous supervision which court cannot provide.

  • A CONTRACT WHICH IS SO DEPENDENT ON THE PERSONAL

QUALIFICATIONS OF THE PARTIES THAT THE COURT CANNOT ENFORCE SPECIFIC PERFORMANCE OF ITS MATERIAL TERMS.

If X and Y enter contract where Y must sing for X. Due to some reasons X failed to do so. Now, X cannot enforce Y for the performance of the contract under this Act, however one may get compensation for this non- performance.

Many are of the opinion that contracts of personal service should not be specifically enforced. Several reasons are given for not granting specific performance of contracts of personal service. Firstly, it is said that contracts of personal service are based on personal faith and confidence. Further, it is said that enforcement of such contracts would involve detailed supervision. It is also considered that enforcement of such contracts of personal service would be opposed to public policy in the case of personal service (like that of a dancer, artist, musician, etc.), the efficiency and personal qualities of the person are involved, and therefore, specific performance is not granted. Even if such a person is forced by the Court to honour the commitments, the quality of his service can never be procured.

On the other hand, Lord Denning in Hillv. C.A. Parsons & Co. Ltd[1], has made a categorical observation that, in certain cases, declaring termination of service to be invalid is consistent with the needs of the time. He would not hesitate to grant such a declaration, even though it virtually amounted to specific enforcement of personal service.[2]

4. A CONTRACT WHICH IS IN ITS NATURE DETERMINABLE.

An orders 12 pens from S’s shop but later S cancels the order within the certain time the A would have allowed by refunding the price of pens Here A cannot claim the Specific Relief Act because despite the order the S could have released himself out of contract within sometime and paid the refund that is compensation.

Sanjana M. Wig (MS) V/S Hindustan Petroleum Corp. Ltd.[3]

In this case the appellant and the smt Bimala Devi They hey Oban both were partners in M/s Tilak Automobiles and the respondent Hindustan petroleum Corp. Both entered into dealership agreement. In the clause 55 of the agreement was mentioned that respondent has the liberty to terminate this agreement which reads as:

(A) If the Dealer shall commit a breach of any of the covenants and stipulations contained in the Agreement and fail to remedy such breach within four days of the receipt of a written notice from the Corporation in that regard.

(B) Upon

  • The death or adjudication as insolvent of the Dealer if he be an individual.
  • The dissolution of the partnership of the dealer’s firm or the death or adjudication as insolvent of any partner of the firm if the Dealer be a firm.
  • The liquidation, whether voluntary or otherwise or the passing of an effective resolution for the winding up, if the dealer be a company or a co-operative society”[4]

On the death of the Bimladevi, respondent claimed the termination of contract, however the dealership was permitted to continue with the consent of both parties. On 20.12.2002 the respondent claimed alleging violations of clause 9, 42, 44 and 55(a) of the dealership agreements made on 09.02.2000. After few default notices, on 20.12.2002 on the ground of default, the agreement was finally terminated in the terms of notice dated19.03.2004.

As the agreement was terminated with the death of the appellant’s partner but as there was mutual consent and agreement was ad-hoc one. And the appellant committed default in payment of dues and the dealership agreement had come to an end, with the court did not provide the petitioner relief as the agreement got terminated.

The Specific Relief Act, 1963 is much needed with the aim of keeping pace with rapid economic growth in the country., as it has set of reliefs provided to the parties of the suit. Many times, during the breach of contract parties are not provided with enough relief at this time this act plays a crucial role. This act has different reliefs and enforcing rules which focuses on providing enough compensation to all. Main aim being that one person should live with the damages and losses they faced and those who have caused such a position, should not get away easily. This act provides justice to all including those who are not liable for Specific Relief Act, as mentioned in S. 14. So, it gives justice to people who have faced wrong. Further it must be noted that specific performance is a discretionary relief, and the Court may refuse to grant the specific performance of a contract even though such contract does not fall under S. 14.


[1] . (1971) 3 All. E.R. 1345

[2] C. Jamnadas & Co. I THE SPECIFIC RELIEF ACT, 1963, pg. 24

[3] (2005 )8SCC 242 https://indiankanoon.org/doc/1172863/

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