Specific performance of a contract:- A case study

ABSTRACT

“Specific Performance is one of the key remedies in the Contract Law which will compel a party to fulfill all its contractual obligations in the way they have been promised”. It also ensures that the parties will receive exactly what they have asked or agreed for, unlike financial damages which will be given as a compensation for a breach of contract. This remedy is precisely very important when the subject matter of the contract is clearly defined in terms and cannot be changed, then in such a case financial compensation will not be sufficient to justify or compensate the injured party. 1

To obtain specific performance, many factors must be proved, a valid and reasonable contract of enforceability, a material breach by the other party, insufficiency of monetary damages as a remedy, and possibility of enforcement by the court. Even if these factors are met, the breaching party can raise the defenses to avoid being compelled to perform the contract.

Specific Performance is the most common application in Contracts which are involved in the sale of specific and special goods, such as real estate or costly artwork. 2 It can also be used in contracts for mere performance of the personal services. Understanding this concept of specific performance doctrine is very essential for both business activities and persons entering the contracts to perform and ensure that they can easily enforce their contractual rights in an effective manner.

Introduction:

The Implementation of the contract extends it to mean that any party to the agreement will need to fulfill all obligations under the agreement as will be deemed appropriate from the terms of the agreement. This is initially formulated when the physical or tangible incentives and penalties are considered inadequate to enforce a given breach of agreement. However, in addition, it will ensure that the party needs to pay for each of the expected obligations that were obliged by them in the agreement and opposed to merely offering money without meeting the obligations.

The way of explicit execution with commission in the agreement regulation couldn’t be more significant as it serves as the fundamental outlet for judging the agreements and assuring that the forms will adhere to their legally binding duties without it they will be entitled to contract breaches with the exception of knowing that they can tender the money and avoid fulfilling the commitments this severely undermines the credibility of the authoritative agreements and the reassurance of confiding in the transactions. Specific Performance is a foundation cover in the contract law, assuring that both sides accomplish their contractual obligations. 3

Direct performance has been referred to as mentioned under the agreements where the special or the extraordinary products or services are provided under which mere monetary subrogation was not enough to keep the non-performing obligations legally answerable for legal consequences for agreed upon performance. 4 For instance, where the land contracts stipulate that the item has to be extended, it will not be possible to do this to protect the buyer merely by establishing money where the dealer has defaulted to honor the agreement. In that sense the direct execution enhances on the buyer’s ability to request and subsequently compel the dealer to deliver the item to a level of conformity to the contractual terms as agreed. And finally, specific performance (SP) is also available for contractual breach of contract as a cause of action. The understanding that one can be compelled to fulfill legal duties irrespective of the set principles or why avoiding going to the courtroom continues to underscore the significance of following through personal commitments and deterring one from violating contractual agreements.

This codified speech and cooperation in commercial relations which brought positive tones in commerce and legal business. Specific Performance provides a substitute relief when granting financial cover demonstrates inadequate. 5 In sum, the discussion reveals that the act of explicit execution is a core activity in agreement regulation that ensures compliance with legally enforceable obligations where monetary terms fail to suffice or are unattainable. It will make access and compliance unleash fellow parties to respect their commitments and contributes to respect and reliance towards authority connections.

Evaluation of Specific Performance:

Specific Performance is a fair relief that can be granted for the violation of contractual obligations, needing the party to carry out their promises under the contract. 6 The basic principle is that the specific performance will only be granted where injury would not provide a satisfactory relief to the beneficiary. Specific performance is generally awarded when financial reimbursement would not sufficiently recover the violation, frequently relevant to specific goods or real estate. 7 Although, the request of specific performance is questioned for many orders. The contract must be well defined, the requesting party should have satisfied all their requirements, and the execution should be practical without striking excessive destitution on the violating party.

It is a strong relief, but it is not always accessible. 8 Courts are always careful in awarding this type of relief, mainly in the cases which need the special attention or requiring unique favor, to keep away from impossible situations or infringements. “Thus, while specific performance is the most precious relief for ensuring the implementation of these specific contractual obligations, it’s use is restricted to guarantee objectivity and viability.” In personal service contracts the courts will usually not force the personal services, like to force someone to carry out a job. 9

Background:

The Specific Performance is a relief embedded in fairness, factually evolved in the English Chancery Courts (ECC) to label the circumstances where the financial remedies were insufficient to relieve the violation of the contract. This relief impels a party to make sure that their contractual promises specifically as expressed, guaranteeing the discontented party will get the benefit of the agreement. Specific Performance is precisely advocated in the business demanding the specific goods, such as real estate or the infrequent items, where the content can’t be easily replaced. The relief is optional and unforeseen upon the existence of an understandable and legitimate contract, the insufficiency of legal reliefs, and the viability of the court management of the performance. Contract is the actual performance as per the agreement and it goes against with remedies or the financial reliefs for the non- performance of contract (NPC). 10

The background of the specific performance of a contract will necessitate a legal relief where the courts will order the party to perform all their contractual promises. 11 Courts usually reserve this relief for the matters where the equity and fairness demands the insist on compliance to the contractual obligations. Specific Performance is the optional relief, means the courts are having the power to grant it or not. so, for the courts to award it the aggrieved party must usually prove that they have hold on to their end of the barter and that the financial remedies will be insufficient. 12

Comparison to Damages:

Specific Performance and Damages are the two main reliefs for the violation of the contract, each one of it with the different aspects and conditions. Specific Performance is an important component that relates to the violation party to ensure their contractual promises same as accepted. Specific Performance forces the violating party to ensure all their contractual Responsibilities and obligations, and it also make sures that performance. These are the main remedies available in the contract law for the violation for the contract. 13 It is usually necessary when financing remedies are insufficient to cover for the breach, precisely in matters which are likely specific items or services, such as real estate, where no adequate remedy is provided. Damages are the financial compensation given to cover the non-violating party for all the damages caused by the breach. 14

This remedy is usually applied based on the necessity of the appropriate and reasonable of the required promised activity. On the contrary, damages are the legal relief containing a financial support for their damages, trying to keep them in the place they would have been in had the contract been carried out as agreed. This is a legal relief, usually provided as a legality of right if a violation is found proven. 15

Elements Required for Specific Performance:

Specific Performance for a contract can be enforced only when few important components are present. The contract should be rational and logical with transparent and consistent designates that can be implemented by the court. Two sides should have made the agreement by themselves, with reciprocal accord and without any force, deceit, or catchment. The side demanding specific performance should have satisfied their own contractual terms or be ready and willing to do so. Moreover, Specific Performance should be an acceptable and fair retrieve, usually when financial compensation is insufficient to cover for the violation of the contract. The Court is rationally bound to implement the side’s accomplishment of the contract. 16

Existence of Valid Contract:

“Specific Performance is a fair retrieve in the contract law enthralling a side to implement the contract as per to its specific requirements, dependent upon certain terms.” These involve an understandable choice and unambiguous receipt, reciprocal deliberation, and permanent commitment on two sides. The sides associated should have the lawful position to contract, and the purpose of the contract should be legitimate. 17 The conditions of the contract should be explicit enough for the court to impose, and the discharge should be possible. 18

Moreover, specific contracts, like those requiring the sale of real estate, should be in writing under the law of deceits. Courts also regulate the justice and valuation of ordering specific performance, which frequently satisfying it when the content is special and financial compensation are insufficient. If these circumstances are adequate, a court may order specific performance to make sure that the contract is properly contented as agreed.

Formation Requirements:

A Valid Contract needs a clear offer and acceptance, reciprocal deliberation, compulsory requirements on two sides, and the lawful measurements of the parties involved. The agreement’s grounds should be legitimate, and its conditions should be legal, and it’s explicit sufficient for the imposition. Performance should be feasible, and “in certain cases, such as those requiring real estate, the contract should be in writing” to abide with the law of deceits. These components make sure that the contract is intelligible, just, and contractual, giving a strong impression for legitimate conditions and damages. 19

Contractual Terms and Conditions:

Contractual terms and conditions are the specific conditions that describe the rights, obligations, and responsibilities of every side in the contract. These conditions involve the provision of task or items to be given, receipts information, transport information, and time of the contract. 20

Conditions for termination, dispute settlement mechanisms, and government regulation of the law are also important factors. Clear and accurate terms and conditions help lessen the mismanagement and the misunderstandings and they provide a better understanding of the legal framework for addressing the issues of any kind that may arise during the contract’s implementation. 21

Inadequacy of Legal Remedies:

In the context of Contract law, the inadequacy of legal remedies frequently gives grounds for the citation of specific performance as a retrieve. Legal retrieves, firstly financial compensation, may be inadequate when the “content of the contract is special or incomparable, such as real estate or rare items, “where the deprivation can’t be precisely counted or reimbursed by finances alone. 22

Additionally, circumstances where financial repayment fails to meet the violation’s actual effect on the non-violating side, due to sentimental value or special needs, also exceed the limits of lawful reliefs. Specific Performance, therefore, becomes important to make sure that the balance of equity and fairness by making the violating side to complete their contractual promises as firstly accepted, thereby upsetting the contract’s integrity and the sides expectations. 23

Limitations of Monetary Damages:

Monetary damages, while frequently adequate to cover the violations of the contract, have limitations that can make the specific performance a more significant cover in specific cases. 24 Monetary damages may be insufficient when the content of the contract is special, “such as in real estate transactions or the sale of special items, etc. “where the value is not measurable. In such cases, specific performance compels the violating side to fulfill their promises as accepted upon, to make sure that the other party gets the same performance they were promised. 25 Moreover, financial incentives may not always recover the special advantages or sentimental value binded to “the specific performance of a contract, underlying the need of this particular equity cover when financial incentives fall short in making the aggrieved side whole”.

Unique Nature of Subject Matter:

The unique nature of subject matter in the contracts underlies the significance of the specific performance as a retrieve. When the content is unique, incomparable, or of important sentimental or planned value, financial remedies may not sufficiently covert he other party. 26 Examples include contracts involving real estate, artwork, or customized items where no suitable substitutes exist. Specific Performance makes sure that the violating side is compelled to fulfill their contractual promises particularly as accepted upon, addressing the singular qualities or benefits that led to the initial contract. This remedy thus serves to protect the expectations and interests of the other side in matters where the specific nature of the content makes financial compensation incomparable or inadequate. 27

Feasibility of Performance:

Performance related to “specific performance of a contract refers to the feasibility of implementing a contractual obligation that needs a side to do a specific task, “such as transfer items or delivery of acts, rather than asking for financial assistance as a remedy for the violation. This cover is usually sought when the content of the contract is special and financial compensation alone would not sufficiently cover the violation. 28 Courts assess possibility based on whether the task in question can reasonably be done and whether it is appropriate and clearly defined in the contract terms. Factors such as practicality, legal enforceability, and the potential for achieving the objective outcome are important considerations in determining the possibility of specific performance as a cover for the contractual violation (CV).

Availability of Subject Matter:

The availability of subject matter related to” specific performance of a contract hinges on whether the content is special or readily accessible or changeable. 29 “Specific Performance is usually awarded when the content is specific, such as in the real estate transactions involving a particular property or in contracts for rare or custom-made items. 30 Courts assess the quality and availability on the basis whether the requested performance can be reasonably satisfactory and whether it goes with the “terms of the contract. 31” Factors such as the nature of the content, and practicality of the enforcement plays the important roles in determining the appropriateness of the specific performance as a cover for the contractual violation”.

Practicality of Enforcement:

The practicality of enforcement relating to specific performance of the contract depends on various important aspects. Courts will see whether implementing the “specific performance cover is possible and practical given the circumstances of the matter”. Components such as the clarity and reliability of the contractual agreement, the ability of the court to determine and interpret the performance, and the practicality of coercing a side to do a specific act are all evaluated. 32 Moreover, transportation considerations, such as time constraints and the availability of resources, “play a key role in determining the practicality of implementing specific performance”. Ultimately, “courts strive to determine the rights of the parties involved” while ensuring that any cover imposed is both fair and reasonable to implement under the law. Thus, while “specific performance” serves as an important factor in contract law it depends on several key factors. 33

Legal Basis for Specific Performance:

“The legal basis for specific performance reclines in the concept that valuation” tries to find justness more absolutely than financial injuries solely can attain. 34 Bench awards specific performance when it is upright and impartial to do so, accounting components such as the possibility of implementation, the lucidity of the juridical conditions, and the performance of the sides. It is rooted in fairness, which strives to ensure a solution when legitimate compensation are inadequate. It is established on the concept that when a juridical promise necessitates special content, such as actual possessions or distinctive items, financial damages can’t correct the violation entirely. 35 Bench of value intercede to secure the discharge of the commitment as concur upon, by such means conserving the sides beliefs and the commitment’s honesty. Specific performance is awarded when the agreement is intelligible and explicit, the complainant has satisfied or is ready to satisfy their responsibilities, and no sufficient legitimate solution subsists. 36 This unbiased retrieve is optional and contingent on the objectivity and possibility of imposing the settlement.

Common Law Origins:

The origins of specific performance in common law turn up to the evolution of impartial solutions in the English Bench of judicature, where the stiff and frequent insufficient retrieves given by the common law benches, such as financial injuries, requires more pliable keys. 37 Specific performance came out as an impartial solution to label circumstances where financial reimbursement could not sufficiently treat a violation of commitment, especially in occasion requiring special or incomparable goods, like land or scarce items. 38 This concept was built on the idea that equity aims to achieve fairness and justice by ensuring sides accomplish their contractual responsibilities, thereby creating a better comprehensive approach to remedying violations than what was available under the common law system alone.

Equitable Principles:

The equitable principles underlying “specific performance of a contract stress objectiveness, equity, and the fulfillment of contractual obligations” when financial terms are insufficient. 39 Courts of equity consider components such as the specialty of the content, the lucidity and correctness of the contract conditions, and whether the side seeking specific performance has acted in good faith and performed their contractual obligations (CO) or is willing to do so. Specific performance is awarded to prevent unjust enrichment and to ensure that the side receives the exact performance promised, particularly in situations involving specific items or properties where substitutes are not available. 40 The remedy is discretionary, allowing courts to weigh the interests of both parties “and the feasibility of enforcing the contract”.

Judicial Discretion in Granting Specific Performance:

Judicial discretion in granting specific performance permits the bench to contemplate the distinctive conditions of every one matter, on behalf of strictly appointing legitimate concepts. 41 This pliability guarantees that the retrieval of specific performance — enthralling a side to attain their juridical commitments — is only granted when it is impartial and dispassionate. Justice evaluates components like the objectivity of the arrangement, the conduct of the sides, and the possibility of implementing the sequence, point to attain a steady and sensible result.

Factors Considered by Courts:

The bench contemplates several elements when determining in any case to award specific performance, together with the frankness and honesty of the juridical conditions. 42 The sufficiency of financial compensation as a cover, and in any case the side looking about for performance has reacted in credibility. They also assess the possibility and viability of implementing the performance, the deportment and management of both sides, and any possible excessive privation that implementation strength source. 43

Discretionary Limits:

The discretionary limits on awarding specific performance are led by postulates of fairness, guaranteeing that this reward is not awarded capriciously. 44 Juridical demanding individual solutions or those without intimacy of commitment are normally inappropriate for specific performance, highlighting the need for equity and justice in judicial decisions.

In the case of K.S. Vidyanagar & Ors. Vs. Vairavan AIR (1997) 3 SCC 1, “The Hon’ble Supreme Court of India” highlighted “the importance of equitable principles in awarding specific performance”. “The court emphasized factors such as the delay in seeking the remedy and the conduct of the parties. It underscored that specific performance should not be granted automatically but rather at the court’s discretion,” considering the unique circumstances and fairness of each case. The judgment also pointed out that if monetary compensation is adequate, specific performance should not be the default remedy. 45 These limits ensure that enforcement is equitable and considers the circumstances of each case. The case draws an main importance of the specific performance in various areas.

Practical Thought for Seeking Specific Performance:

Seeking specific performance as a legal remedy involves several practical considerations. The court must determine that financial compensation is insufficient to protect the affected side and that the juridical in question is fair and enforceable. 46 The party seeking this remedy must demonstrate they have fulfilled their own contractual obligations or are ready and willing to do so. Additionally, “specific performance is usually sought in cases involving unique items or real estate, where no adequate substitute exists”.

Cost-Benefit Analysis:

“A cost-benefit analysis” for seeking specific performance of a contract requires evaluating the potential gains versus the expenses and risks involved. 47 On the benefit side, specific performance can provide the aggrieved side with the exact fulfillment of the contract terms, especially valuable in cases involving unique assets or properties that cannot be easily replaced. Conversely, the costs include legal fees, the time investment required for litigation, and the possibility of prolonged court proceedings. There is also the risk that the court may deny the remedy, leading to further delays and potential additional costs. 48

Timeline for Relief:

The timeline for obtaining relief through specific performance of a contract usually involves several stages, starting with filing a lawsuit and serving the defendant, followed by a period of discovery where both parties gather evidence. Pre-trial motions and hearings may take place, potentially followed by a trial if the case isn’t settled beforehand. 49 The duration of this process can vary significantly, often taking several months to a few years, “depending on the complexity of the case, court” schedules, and any potential appeals. Delays can arise from procedural issues or strategic actions by either party, making the timeline somewhat unpredictable. 50

Alternatives to Specific Performance:

When “specific performance is not a satisfactory retrieve for a” violation of contract, many substitutes are accessible to mark the matter. Financial compensation can be sought to compensate for damages, including compensatory, consequential, and, in infrequent instances, punitive damages, as well as nominal damages when no substantial loss is proven. 51 The contract may be rescinded to “restore the sides to their pre-contractual positions (PCP),” or reformed to accurately reflect their true intentions. Restitution ensures that the violating side returns any benefits received to prevent unjust enrichment. Additionally, liquidated damages predetermined in the contract can be enforced if they are reasonable. Injunctions can prevent actions that would breach the contract, while quantum meruit ensures fair compensation for work performed under an unenforceable contract or in the absence of one. 52 These remedies offer various ways to resolve contract disputes based on the specific circumstances and nature of the agreement.

Liquidated Damages:

Liquidated damages “for specific performance of a contract refer to a” predetermined amount stipulated in the contract that a party must pay if they fail to fulfill their obligations as specified. These damages are “agreed upon by the parties during the formation of the contract and are” designed to compensate for losses resulting from the failure to perform specific terms rather than requiring “the breaching party to perform the exact duties outlined in the contract.” 53 The enforceability of liquidated damages depends on their reasonableness and their reflection of anticipated harm at the time of contract formation, ensuring they are not punitive but a fair estimate of potential losses. This provision offers a clear, efficient remedy for breaches where calculating actual damages would be challenging, thereby promoting certainty and reducing the need for litigation. 54

Rescission of Contract:

Rescission of a contract as an alternative to specific performance “involves canceling the contract and returning the parties to their pre-contractual positions.” 55 When a party breaches a contract and specific performance is either not possible or not appropriate, rescission nullifies the agreement, effectively treating it as though it never existed. This remedy aims to restore both “parties to the state they were in before entering the contract,” ensuring that any benefits exchanged are returned. Rescission is particularly useful when continuing the contract would be unjust or impractical, offering a clean slate and preventing further disputes over the breached terms. 56

Injunctions:

Injunctions can serve as a retrieve for imposing specific performance of a contract by enthralling or disabling definite performance to guarantee adherence with contractual obligations. When a party breaches a contract, a court may issue an injunction to terminate them from engaging in works that would violate the terms of the contract i.e. (a prohibitory injunction) or to compel them to take specific actions required by the contract (a mandatory injunction). 57 This remedy is particularly useful in situations where financial compensation would be insufficient or where the concept of the contract is special, making specific performance the most appropriate way to enforce the agreement.

The case of M. Lachia Setty & Sons Ltd. Vs. Coffee Board, Bangalore AIR (1981) 1 SCC 285, is significant in Indian contract law. In this case, the Coffee Board sought liquidated damages from M. Lachia Setty & Sons Ltd. for failing to fulfill their contractual obligations. The Supreme Court (SC) upheld “the enforceability of the liquidated damages clause,” distinguishing it from a penalty by emphasizing its nature as a genuine pre-estimate of loss. The court further noted “that specific performance would not be awarded if damages provided an adequate remedy. The judgment also clarified that a contract could be rescinded when one party commits a violation, allowing the other party to terminate it. Additionally, the court highlighted that injunctions to prevent breach of contract would generally not be issued if it effectively forces specific performance. 58

Role of Specific Performance in Contract Negotiations: 59

In contract negotiations, specific performance plays an important part as it relates as a potential remedy that can compel a party to fulfill their contractual obligations. Thus, ensuring that the agreement’s terms are met precisely as agreed. 60 Specific performance as a potential outcome influences risk allocation, encouraging parties to negotiate more carefully and with greater clarity on their obligations. Contractual provisions that outline the conditions under which specific performance can be sought are essential, providing a clear framework for enforcement and mitigating uncertainties. 61 Additionally, integrating effective “dispute resolution mechanisms, such as arbitration or mediation,” helps manage conflicts by offering structured paths to resolve disagreements before they escalate to litigation. By incorporating these elements, parties can better manage risks, ensure contract adherence, and provide a clear, enforceable path for resolving disputes, ultimately fostering a more stable and predictable contractual relationship. 62 In conclusion, specific performance enforces contract terms, deters breaches, and emphasizes the need for clear agreements. 63

In Indian case law, the Supreme Court’s decision in “Adhunik Steels Ltd. Vs. Orissa Manganese and Minerals Pvt. Ltd. AIR (2007)” 7 SCC 125, is a landmark judgment on the topic of specific performance in contract negotiations. The Court underscored the principle that “specific performance can be decreed when financial compensation is insufficient,” particularly when the contract involves special or irreplaceable goods. The case highlighted the significance of explicit contractual provisions and the need for clear, unequivocal terms regarding obligations and remedies. “The High Court (HC) also emphasized that the availability of specific performance” depends on the equitable nature of the relief, meaning it should not result in undue hardship to the party required to perform. This decision reinforced the necessity for well-drafted contracts that contemplate specific performance as a remedy and stressed the role of dispute resolution mechanisms, advocating for structured processes such as arbitration to resolve conflicts efficiently. The judgment serves as a critical reference point for understanding how Indian courts approach the enforcement of specific performance, risk allocation, and the significance of clear contractual terms in commercial agreements. 64

Challenges in Enforcing Specific Performance: 65

Enforcing specific Performance in contractual obligations encounters many notable provocations, inclusive of actual barricades, legal exposition, and matters with cross-border enforcement. 66 Practically, “specific performance may be unworkable if the content of the contract” is special or implies private facilities where enthralling performance may be unrealistic or even impossible. Legal interpretation also plays a critical role, as courts often exercise discretion in awarding specific performance, considering components like sufficiency of damages, possibility of enforcement, and fairness to both parties. This can lead to inconsistent rulings and uncertainty in legal outcomes. Additionally, when contracts involve parties or properties across different jurisdictions, cross-border enforcement becomes a complex issue, necessitating the navigation of different legal systems and international treaties. 67 68 Differing legal standards and the lack of reciprocal enforcement agreements between jurisdictions can severely hinder the effective enforcement of specific performance, making it a less attractive remedy for aggrieved parties in international contracts. These multifaceted challenges collectively complicate “the enforceability of specific performance as a legal remedy”, often leading parties to seek alternative resolutions such as financial damages or settlements. 69 The parties should be mandated to perform the duties and the courts should also determine the sufficiency of the given cover.

In the case of M. L. Devender Singh Vs. Syed Khaja AIR (1973) 2 SCC 515, the Supreme Court of India faced important challenges in enforcing specific performance. The dispute involved a contract “for the sale of immovable property, where the plaintiff sought specific performance” of the agreement. The defendant resisted, citing delays and changes in the property’s value over time, among other factors. “The court observed that specific performance is not an automatic remedy and must be” considered in light “of the plaintiff’s readiness and willingness to perform their obligations under the contract”. Additionally, the court evaluated the possibility and fairness of enforcing such performance. The judicial interpretation in this case illustrated the complexities and practical barriers inherent in specific performance, as the court ultimately denied the relief due to the substantial delay and the changed circumstances that would make enforcement inequitable. This case highlights the judicial discretion involved and the practical challenges that can impede the enforcement of specific performance in India. 70

Remedies for Breach of Specific Performance: 71

Specific performance, just like all other remedies in a contract of law world, are made to remedy the party breaching the omnibus act and conform to their side of the original bargain instead of just giving monetary damages to the victim. 72 When the subject of a contract is one of a kind or rare and unique (e.g. real estate, certain other bespoke items, works of art) such that money “would not be an adequate remedy to” put “the non-breaching party” in status quo, specific performance is seen as particularly suitable and are more used. Equity remedies, this type of remedy includes specific performance.

(An equitable remedy, a “form of injunctive relief) that compels one party to” perform by court order what it agreed to in the contract. A specific performance must contain clear and concrete terms to be manifest in the contract. Clear and unambiguous in its expression, and it must also be executed in good faith by the party seeking this remedy while doing their part under the contract. 73 They are the ones who decide whether it is fair to make a party follow certain provisions feasible for the performance can be practically achieved without continuous overseeing or slamming duty onto the violating party it was to help.

Moreover, whether the remedy will be denied if it would cause an undue hardship or a severe unfairness, or if the breaching party can show that performance is impossible. 74 Specific performance aims at doing as nearly as possible that which, if not done, will result in continuing the position of the injured party exactly that which it would have been had the contract in question been), and the transaction will have been done in a way has respected the contractual arrangement (CA) as it was originally intended, and entered into. 75 Equity law addresses this as it reflects the idea that some contractual commitments and things are inherently valuable that cannot be replaced solely by the pecuniary compensation. In this sense, specific performance acts as an indispensable means of preserving the sanctity of contracts and of doing justice by making the performance an end, not only on paper but also in fact. 76 where money itself cannot serve as a proper means of redress to the wrong done. 77

In the case of “Laxman Tatayaba Kankate and Anr. Vs. Taramati Harishchandra Dhatrak AIR (2010)” 7 SCC 717, This was a matter before “the Supreme Court of India “where the “writ petition under Article (Art.) 32 of the Constitution had sought direction against specific performance of contract for sale relating to immovable property. “The plaintiffs were seeking to have the defendant abide by an agreement of purchase and sale, which was denied by way of employment. The court held that “specific performance is an equitable remedy, within the sound way of a” discretion of the trial court to grant it upon such terms and of the conditions as justice may require, and traditionally called for in cases where legal remedies at law are inadequate owing to a lack of some essential. But the trial “court and later then the Supreme Court held that” since plaintiffs have fully performed their part of contract and terms agreed are clear and the most enforceable, the plaintiffs were entitled to specific performance. “The court also established that ordering specific performance would not create inordinate hardship to the defendant”. Thus, by way of a Decree, the Court directed the defendant “to execute the sale-deed in-favor of the plaintiffs for specific performance of contract” as was originally agreed upon between parties. 78

CASE STUDY

Satyabrata Ghose vs Mugneeram Bangur & Co. and Another AIR (1954) 44 SC 310

Background:-

“The case of Satyabrata Ghose vs Mugneeram Bangur & Co. (1954) is a landmark supreme court” judgment on “specific performance of any contract in the backdrop of land development and sale agreement.” 79

Facts:-

In the case of “Satyabrata Ghose vs Mugneeram Bangur & Co. (1954)” actual tender was claimed by Satyabrata Ghose for failure to operate a land sale and development contract due to World War II restrictions. 80 The well-known issues to be argued about were whether the doctrine of frustration applied for the defendants arguing that the contract was frustrated and impossible to perform. 81

Parties Involved:-

Plaintiff: Satyabrata Ghose
Defendants: Mugneeram Bangur & Co. and Another

Contract Details:-

Satyabrata Ghose “entered a contract for the purchase of a plot with Mugneeram Bangur & Co. The” plot of land was one section of a larger area that Mugneeram Bangur & Co. developed and turned into individual plots for sale.
The defendants in terms of the contract were to deliver possession of the plot to the plaintiff upon construction of certain development works, like internal roads and drainage etc. 82

Breach of Contract:-

Mugneeram Bangur & Co. failed to discharge its contractual obligation of completing the development works within the agreed time.
The plaintiff, Satyabrata Ghose claimed specific contract performance (SCP) from the other party to only complete the development works and handover possession of the plot as per terms agreed. 83

Legal Issues:-

Specific Performance:- Whether the plaintiff is entitled to a decree of specific performance in terms of Clause 17” and whether the defendants are directed to complete the development works and hand over full possession of the plot? 84
Frustration of Contract:- Whether the consideration for the contract must be performed, had the contract been frustrated, to amount to impossibility or impracticability?

Court Rulings:-

Trial Court:- The lower court awarded the case “in favour of the respondent, Satyabrata Ghose, and granted the injunction of specific performance of the contract.”
High Court:- The defendants ran to the high court to appeal, but they lost the appeal, and the specific performance order was upheld.”
Supreme Court:- The defendants further appealed to the Supreme Court of India They also continued appealing to higher authorities. 85

Supreme Court Judgment:-

Frustration of Contract:- The defendants argued that the contract had been frustrated due to wartime regulations and government orders, which prevented them from completing the development works on time. 86
The Supreme Court examined “the doctrine of frustration under Section 56 of the Indian Contract Act, 1872. The Court held that the doctrine of frustration applies when an unforeseen event renders the performance of the contract impossible or fundamentally alters the nature of the contractual obligations”. “In this case, the Court found that the wartime regulations did not make the performance of the contract impossible; they merely caused a delay.” 87
Specific Performance:- Consequently, the Court affirmed the proposition of law that special relief by way of mandatory injunction is an opposite mode of relief in situations where the money decree proves to be ineffectual. 88
The Court admitted that for the plaintiff, it was not only a question of recovering the pecuniary damages but also a particular piece of land as accorded by the contract; money alone will not be able to fill his expectations as well as the intended use of the piece of land.
Relevant to contractual relations, the Court also stressed the need for the parties to faithfully perform their obligations and afford justice to the undeserving but nonetheless occurring gains.

Outcome:-

Pertaining to the case, the Supreme Court mixed the decisions of the lower courts and decided in favor of Satyabrata Ghose. The Court ordered Mugneeram Bangur & Co. to finish the development works and hand over the plot to the plaintiff “in accordance with the provisions of the building agreement signed between the parties.” 89

Significance:-

“The case of Satyabrata Ghose v Mugneeram Bangur & Co”; is a landmark decision in Indian legal history especially in the area of contract enforcement for land and property development. 90 The decision offers a precedent for the cases of frustration and conditions under which an owner can recover a specific performance as a form of equitable remedy. 91 This landmark judgment clarified that mere difficulty and as in or inconvenience in performing the contract is not sufficient to invoke frustration; the event must fundamentally alter the nature of the contractual obligations.

Key Takeaways:-

Application of Doctrine of Frustration:-

This case helps in understanding the concept of frustration in” Indian contract law and points out towards the fact that mere delay or increased difficulty in performance changes the nature of contract does not amount to frustration unless it becomes impossible or different in some way it was agreed. 92

Specific Performance as a Remedy:-

As the case illustrates, specific performance remains an appropriate measure where differential or special is present and/or where money cannot suffice. 93

Enforcement of Contractual Obligations:-

The judgment also brought out the importance of judges’ understanding of contractual expectations as well as the desire to fairly hold contracting parties to their word.

Equitable Relief:-

The Supreme Court’s decision highlights the importance of equitable relief in preventing unjust enrichment and protecting the legitimate interests of the aggrieved party.

CONCLUSIONS AND RECOMMENDATIONS: 94

In the area” of contract law,” “specific performance is” another substantial “legal remedy where the court requires the” recipient “to” deliver in accordance with the established agreements instead of paying for the breach of terms. 95

Specifically, a case in point on the specific performance is a useful reminder of how the judiciary is anxious to do justice in cases of contractual breaching as it seeks to remove unfairness from the social fabric. This is normally when the contract is about special issues, or the material damages cannot be a satisfactory form of compensation. Specific performance that courts seek to place emphasis on is meant to enforce the parties’ intents of the contract and uphold the sanctity of contract in business.

In practice, the performance depends on a number of factors that include the capacity in which “the aggrieved party is in a position to enforce the literal terms” of the contract as well as the special characteristics of subject matter dealing with. 96 The legal remedy known as specific performance is granted sparingly by the courts, as they consider the scales of justice in favor of one party or the other and the feasibility of certain courses of action involving performance of a particular act. The advice that any party to a contract would be advised on would be, Parties to the contract should ensure that the contracts prepared and entered into are detailed and where the parties foresee any issues, which may lead to disputes then the parties should ensure that they are taken care of/provided for in the contracts. Furthermore, when entering a contract, the parties must engage in due diligence to assess which specific performance remedy suits the contract and the parties involved putting in place measures to enforce or defending such claims under the prevailing legal law. Finally, the doctrine of specific performance in enforcing contracts acts as a measure of enforcing moral and ethical conduct in contract performance that is crucial in business interactions between parties. 97

The Legal Affair

The Legal Affair