‘Contracts Which Cannot Be Specifically Enforced 'Q, Which contract cannot be specifically enforced? ‘Q, What are various defences which can be pleaded by a defendant, (2002) (2003) (2004) Q. Which contracts cannot be specifically enforced? ‘Q. What are various defeces which can be pleaded by a defendant. (2006/S) 1. Introduction: ‘Specific performance is an actual performance of a contract. the plaintiff is entitled to have the ‘specific thing wherefore he has contracted. there are some circumstances when a contract can not be specifically enforced According to Doemory: ‘Specific performance of contract consists in the contracting party is exact fulfillment of the ‘obligation which he has assumed in his doing or omitting the very act which he has undertaken ‘todo or not to do. 2. Relevant Provisions: ‘Sec. 20 and 21 of specific relief act. 3.General rule: Itisa general rule that the plaintiff is entitled for the thing for which he has contract and court ‘can specifically enforce such contract 4, Case law: 19 CLC 625. It was held that where a part of agreement can not be specifically perfumed such part being interlined with the rest of agreement, then whole of the agreement would be hit by the same disability. ‘5. Exceptions to general rule: Exception to the general rule all contained in Sec. 21 all the specific relief act. 6. Contract which can not be specifically enforced: Following are the contracts which can not be specifically enforced.|. Contracts where compensation is an adequate relie! ‘A contract for non-perfarmance of which compensation in money is an adequate relief. Il, Contracts running into minute or numerous detail: ‘A contract which runs into such minute or numerous details Ill. Contracts dependant upon personal qualification : sation can not be enforced. Acontract dependant upon personal qu IV. Contracts dependent upon violation of the parties: A contract dependent upon violation of the parties cannot he enforced ‘V. Uncertainty of terms: ‘A contract the term of which the court can not find with reasonable certainly. VI. Revokable: ‘A contract which isin its nature revokable ‘VIL. Contract made by trustee in excess of their power: Acontract made by trustees either in excess of their power or in breach of their trust. ‘VIIL. Contract by or behalf of a corporation or public company created for spe purposes: Acontract made by or on behalf of a corporation or public company created for special Purposes, or by the promoters of such company, which is in excess of its powers. IX, Contracts of performance of a contitnuous duty existing over a longer period than three years: contract, the performance af which involves the performance of a continuous duty extending ‘vera longer period than three years from its date. X. Non-existence of material part of subject matter: Acontract of which a material part of the subject matter, supposed by both parties to exist, has, before it has been made, ceased to exist. XI.Contract to refer to arbitration: No contract to refer to arbitration shall be specifically enforced.7. Defences of defendant: |. Meaning: It means a denial by the defendant of the truth or validity of the plaintiffs claim, so itis denial of plaintiff claim. Il, Defences in suit of specific performance: Following are the defences available the defedant. Absence of writing or part performance: The plaintiff has not performed the whole of his part of contract and that part left unperformed forms a considerable portion of the whale which does not admit for compensation in money. {ii) Compensation in money is adequate relief: Defendant may set up a defence that compensation in money would be an adequate relief to the plaintit. Uncertain terms: The terms of the contract cannot be fined with certainty. so want of certainty is 3 ground for resisting specific of the contract {iv) Absence of consideration: Contract without consideration is @ good ground for defendant. (v) Great hardshij The performance of the contract would involve hardship on the defendant. (vi) Defective title: The plaintiff can not make good title to the property in accordance with the contract. 0 i) Misrepresentation: The assent of the defendant was obtained under misrepresentation, ( The assent of the defendant was given under mistake of fact. i) Mistake of fact:The consideration paid by the plaintiffs grossly inadequate as to the amaunt to fraud or undue advantage taken by the plaintif. (x) Contract made by company in excess of its power Contract made by the company in excess of its powers is defence for the defendant. (xi) Unfair advantage to the plaintiff: The contract when made gave the plaintiff an unfair advantage to the plaintiff. (xii) Laps of time: Suit for specific performance must be filed within three years if is filed after prescribed period it will be a defence for defendant. 8, Conclusion: To conclude | can say that, the specific performance of the contract is its actual execution. the remedy of specific performance is discretionary remedy. the court will not allow the specific performance when compensation in money isa sufficient remedy, under Sec. 21 of the specific relief act contract same be specifically enforced. the defence against performance of the contract.Specific relief by specific performance of contract Introduction: A contract is an agreement upon sufficient consideration to do or not to doa particular act. The party on whom this contractual obligation rests must not fails 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 Performance’. Orders 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 that damages will be inadequate compensation. Specific performance is deemed an extraordinary remedy, awarded at the court's discretion. Specific performance means enforcement of exact terms of the contract. Under it the plaintiff claims for the specific thing of which he is entitled as per the terms of the contract. For example, if A agrees to sell certain shares to B of a specific company which are limited in number and after payment made by B, if A refuses to sell the shares then Bis entitled to recovery of those shares. Relevant provision: Section 12 of the Special Relief Act, 1877. Definition of contract Under contract act, 1872, section 2 (h): ‘An agreement enforceable by law is a contract. Cases in which specific performance enforceable under section 12: Except as otherwise provided in this Chapter, the specific performance of any contract may in the discretion of the Court be enforced- (a) When the act agreed to be done isin the performance, wholly or partly, of a trust; (b) when there] exists no standard for ascertaining the actual damage caused by non-performance of the act agreed to be done;Illustration: A agrees to buy, and B agrees to sell, a picture by a dead painter and two rare china vases. A may compel B specifically to perform this contract, for there is no standard for ascertaining the actual damage which would be caused by its non-performance. (c) When the act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate reli Illustration: A contracts to sell, and B contracts to buy, a certain number of railway- shares of a particular description. A refuses to complete the sale. B may compel A specifically to perform this agreement, for the shares are limited in number and not always to be had in the market, and their possession carries with it the status of a share-holder, which cannot otherwise be procured. (d) When it is probable that pecuniary compensation cannot be got for the non-performance of the act agreed to be done. Scope of section 12: Under section 12 of the special relief act, 1877, the court has discretion to grant specific performance. The court is not bound to grant specific performance only because it is lawful. The court has to look into the matter and take the decision while using its discretionary powers. + When there exist no standard for ascertaining actual damage: + Itis 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: 1. Where the subject matter of the contract is an immovable property. 2. Where the subject matter of the contract is movable property and, 3. Such property or goods are not an ordinary article of commerce Le. which could be sold or purchased in the market.4, The article is of special value or interest to the plaintiff. 5. The article is of such nature that is not easily available in the market. 6. The property or goods held by the defendant as an agent or trustee of the plaintiff. Case law: 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. Contracts which cannot be specifically enforced: According to section 21: (a) Where compensation in money is an adequate relief: Here the court will not order specific performance of contract as it is expected that the plaintiff will bank upon the normal remedy for breach of contract i.e. remedy of compensation. (b) Where a contract runs into minutes or numerous detail: These contracts includes contract which depends upon the personal qualification or the violation of the parties or is of such nature that the court cannot enforce specific performance of its material terms. In Robinson Davison, it was held by the court that the contract to perform in concert depends upan the personal kill of defendant's wife, and the contract cannot be specifically enforced due to her illness. The other example is construction contract where the detailed terms of contract are not explained. (c) acontract the terms of which the Court cannot find with reasonable certainty; example: A, the owner of a refreshment-room, contracts, with B to give him accommodation there for the sale of his goods and to furnish him. with the necessary appliances. A refuses to perform his contract. The case is one for compensation and not for specific performance, theamount and nature of the accommodation and appliances being undefined. (d)a contract which is in its nature revocable. Example Aand B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership (e)) a contract made by trustees either in excess of their powers or in breach of their trust; Example Aisa trustee of land with power to lease it for seven years. He enters into a contract with B to grant a lease of the land for seven years, with a covenant to renew the lease at the expiry of the term. This contract cannot be specifically enforced. (f) a contract made by or on behalf of a corporation or public company created for special purposes, or by the promoters of such company, which is in excess of its powers; example: A company existing for the sole purpose of making and warking a railway contract for the purchase of a piece of land for the purpose of erecting a cotton-mill thereon. This contract cannot be specifically enforced (g)a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date; (h)a contract of which a material part of the subject- matter, supposed by both parties to exist, has, before it has been made, ceased to. exist. Example: A contracts ta pay an annuity to B for the lives of C and D. It turns out that, at the date of the contract, C, though supposed by A and B to be alive, was dead. The contract cannot be specifically performed.+ Contract of arbitration: According to Section 14(2), a contract to refer present or future differences to arbitration shall not be specifically enforceable.