Specific Performance

n. Law.

The performance of a contract as specified in its terms.

Specific performance

1. The complete or exact fulfilment of the terms of a contract, promise, or obligation

2. An equitable remedy that requires a party to fulfil the exact terms of a contract, promise,
obligation, or decree mandating a remedy and that is used when legal remedies (as
damages) are inadequate (the common law prohibition against specific performance as a
remedy for alleged breach of employment contract - Chady v. Solomon Schechter Day
Schs., 645 N.E.2d 983 (1995)) compare injunction

In the law of remedies, a specific performance is a demand of a party to perform a specific act.
While specific performance can be in the form of any type of forced action, it is usually is used
to complete a previously established transaction. It is the opposite of an injunction.

In practice, specific performance is most often used as a remedy in transactions regarding

land, such as in the sale of land. As well, it is also seen in transactions regarding chattels of
unique value, such as art, heirlooms, and other unique items.

However, the limits of specific performance are narrow. The courts rarely allow specific
performance to be used in the sale of goods. Usually damages equal to the value of the goods
are awarded instead. Moreover, performance that is based on the personal judgment or
abilities of the party on which the demands are made is rarely ordered by the court. The
reason behind it is that the forced party will often perform below their regular standard
when it is in their ability to do so. Monetary damages are usually given instead.

1
SPECIFIC PERFORMANCE, an equitable doctrine under which a court of equity, in certain
exceptional cases where the normal legal remedy, i.e. damages, would not be a sufficient
compensation, orders from a defaulting party a specific or actual performance of the thing which
he had contracted to do. The courts act on their own discretion in affording or refusing the relief
of specific performance, and as a general rule will refuse that relief where the common law
remedy is adequate, where the court would be unable to superintend or enforce the execution of
its judgment, where the plaintiff has himself acted inequitably, or where the enforcement of
specific performance would be unreasonable. Specific performance is usually confined to
executory agreements, such as a conveyance or a lease of land; it is not usually enforced in the
cases of personal acts or in those of contracts for personal service. In the case of a contract for
the sale of a chattel the courts will only order specific performance when the chattel is of
peculiar value to the purchaser and cannot be obtained elsewhere. Precedent guides the courts
considerably, and it is only by reference to a standard textbook that details can be obtained of the
conditions and restrictions which hedge the jurisdiction of the courts. In Scots law specific
performance, or implement, is part of the ordinary jurisdiction of the courts.

(A) Discretionary

SP like other equitable remedies is only given as a matter of discretion, although the discretion
exercised in accordance with settled principles. The discretionary nature of the remedy is well
illustrated by a consideration of the matters, such as the conduct of the claimant, which the court
may regard as a bar to specific performance.

(B) Common Law Remedies Inadequate

Equitable remedies are only available where common law remedies are inadequate. E.g. where it
will be difficult to quantify. SP will not be available if, on the true construction of the contract
the parties have agreed that a specific sum of money is to be paid as an alternative to performing
the contract.

(C) Specific Performance is a Remedy in Personam

An order of specific performance issues against the individual defendant. The defendant must be
in the jurisdiction of the court and be compelled to carry out his obligation. The subject matter of
the contract is outside the jurisdiction of the court.

Penn v Lord Baltimore

An agreement to fix the boundaries of Pennsylvania and Maryland. The claimants sued the
defendant in England to have the agreement specifically performed and one of the objections
taken by the defendant was to the jurisdiction of the court. This was overruled on the ground that
the conscience of the party was bound by this agreement and being within the jurisdiction of this
court, which acts in personam, the court may properly order it as an agreement. Notably, the land
was not in the jurisdiction of the court but the person.

Re Hawthorne

2
The court stated that is does not have jurisdiction when the land in question is not subject to the
crown. In this case the Saxony was not in the Crown’s jurisdiction. It appears that that the
tendency of modern decisions is to restrict the limits within which this jurisdiction will be
exercised.

(D) Ensuring Observance

Equitable remedies will never issue unless the court can ensure that they will be observed. As
equity does not act in vain, SP, will only be ordered where the defendant is in a position to
comply.

Jones v Lipman

The defendant entered into a contract to sell some land to the claimant, then sought to avoid
specific performance by selling the land to a company acquired by him solely for this purpose
and controlled by him. While SP would not normally be ordered against a vendor who no longer
owned the property, here the defendant was still in a position to complete the contact, because
the company was “the creature of the vendor, a device and a sham, a mask which he holds before
his face in an attempt to avoid recognition by the eye of Equity. This SP was ordered against the
vendor and the company.

(E) The Enforcement of Positive Contractual Obligations

Unlike injunctions, the remedy of specific performance is confined to the enforcement of

positive obligations. These obligations must be binding on the defendant. Specific performance
cannot be obtained on an interlocutory basis and does not lie against the Crown.

(F) Time for performance

While SP is a remedy for breach on contract, it may in some circumstances be obtained before
the time for performance has arrived.

Marks v Lilley

The claimant commenced an action for SP of a contract for the sale of land after the contractual
completion date but without first having served a notice making time of the essence of the
contract. It was held that this action was not premature as the equitable right to SP, based on the
defendant’s equitable duty to perform his contract had already accrued.

Hasham v Zenab

3
SP of a contract for the sale of land was granted even before the contractual completion date
where the defendant had been guilty of anticipatory breach of contract. The order would not, of
course, take effect before the fixed date.

(G) Specific Performance and Damages or Compensation

Damages may be awarded either in addition to or in substitution for SP. Cases involving
misdescription in contracts for the sale of land, where the court may grant SP with compensation
in the form of an abatement of the purchase price.

THE EFFECT OF AN ORDER OF SPECIFIC PERFORMANCE ON OTHER

REMEDIES

If a specific performance is granted, but enforcement subsequently becomes impossible, what

remedies are available to the claimant?

(A) Common Law Remedy not Excluded

Johnson v Agnew

The claimant, having contracted to sell mortgaged properties to the defendant, obtained an order
of SP. Subsequently, owing to the defendant’s delay, the properties were sold by the mortgagees
so that it became impossible to comply with the order.
Held by the house of lords : - if a purchaser fails to complete, the vendor can treat this as a
repudiation and claim damages for breach of contract, or he may seek SP. If he proceeds for
these remedies in the alternative, he must elect at trial. If an order of SP is made, the contract still
exists and is not merged in the judgment. If the defendant then fails to comply with the order, the
claimant may apply either to enforce or to dissolve the contract. It follows from the fact that the
contract still exists that the claimant can recover damages at common law.
If the claimant accepts a repudiation, he cannot afterwards seek SP, because the defendant has
been discharged from the repudiation. But if the claimant obtains an order of SP, and
enforcement becomes impossible, there is no reason why the claimant should be precluded from
seeking a remedy at common law.

(B) The Court’s Discretion

The control of the court is exercised according to equitable principles; the relief sought by the
claimant will be refused if it would be unjust to the other party to grant it. In Johnson v Agnew it

4
was the purchaser’s fault that it had become impossible to enforce the order therefore the vendor
was entitled not only to its charge and the termination of the contract, but to damages as common
law for breach of covenant.

(C) Subsequent Performance Regulated by Terms of Order

Although the contract still exists after SP is granted and does not merge into the order until the
legal title has been conveyed, the rights under the contract may be affected by the order. By
applying for specific performance, the claimant puts into the hands of the court how the contract
is to be carried out: the order and not those of the contract.

Singh v Nazeer

A purchaser was granted SP of a contract for the sale of land. The purchaser then delayed, so the
vendor served a completion notice and claimed damages and forfeiture of the deposit.
Held: - that the completion notice was invalid. The machinery provisions of the contract, e.g.
mode and date of completion, were intended to apply to performance out of court. Once SP was
granted, they must yield to any discretions in the order.
Applying these principles, a vendor who obtains SP is not free to sell to a third party if the
purchaser fails to comply with the order. Unless the purchaser agrees to the resale, the vendor’s
remedy in such a case is to apply to court either for enforcement of the order or for an order
terminating the contract.

SPECIFIC PERFORMANCE IN PARTICULAR SITUATIONS

(A) Contracts for the Sale of Land

A claimant seeking performance on a contract for the sale of land must satisfy the requirements
of section 2 of the Law of Property Act 1989. Section 2 provides that a contract for sale or other
disposition of an interest can only be made in writing incorporating all the terms which the
parties have agreed. It cannot however be said that the claimant is entitled to specific
performance, as the order is always subject to the discretion of the court. The court, treating each
party equally, will also give specific performance to the vendor or lessor, although monetary
payment might be adequate compensation.

(B) Contractual Licences

Previously, the rule was that SP would not be granted of a contractual licence to occupy land, on
the ground that the licence created no estate in the land.

5
Verrall v Great Yarmount Borough Council

The defendant council had granted a contractual licence to the National Front to occupy its
premises for two days for an annual conference. The defendant wrongfully repudiated the
contract but sought to avoid SP, partly on the ground that the licence was a transient interest. The
court of appeal affirmed the grant of specific performance to enforce a contractual licence
whereby the National Front was to occupy the defendant’s premises for the purpose of its annual
conference. The remedy of damages would be inadequate as the claimant could not find any
other premises. It was held to be the duty of the court “to protect, where it is appropriate to do so,
any interest, whether it be an estate in land or a licence, by injunction or SP as the case may be.
The court so no reason why it should not order SP of a contractual licence of short duration.

(C) Contract to Pay or Lend Money

Contracts to pay money are normally not specifically enforceable because damages will usually
be an adequate remedy. However SP may be attainable in the following situations.

 Where the contract is to pay money to a third party, so that nay damages awarded would
probably be nominal.
 Where the contract is for the payment of an annuity. SP does not need a series of actions
every time payment is not made and common law will still be inadequate as an annuity will
be conjectural (hypothetical).
 A contract of indemnity if on its true construction, the obligation is to relieve a debtor by
preventing him from having to pay his debt.
 Contract for the sale of land.

Swiss Bank Corp v Lloyds Bank Ltd

The plaintiff bank agreed to lend a sum in Swiss francs to I.F.T., the third defendants, to enable
them to acquire shares and loan stock of F.I.B.I., a new Israeli bank. Under the loan agreement
I.F.T. covenanted to observe all the conditions attached to the Bank of England consent which
had been obtained for the loan under the Exchange Control Act 1947. The conditions were, inter
alia, that on acquisition the F.I.B.I. securities should be held in a separate account; that
repayment of the loan was to be made from the sale proceeds of the F.I.B.I. securities; and that
the scrip of the F.I.B.I. securities was to be held by an authorised depositary. Swiss francs
advanced pursuant to the loan agreement were invested by I.F.T. in F.I.B.I. securities which were
then deposited with the fourth defendants, Triumph, an authorised depositary, of which I.F.T. was
a sub-subsidiary. The following year I.F.T. granted an equitable charge over the F.I.B.I. securities
to the first defendants, Lloyds, the scrip having already been transferred by Triumph to Lloyds,
also an authorised depositary, without specific Bank of England permission. The plaintiff bank
brought an action claiming, inter alia, declarations that it was entitled to be considered an
equitable chargee of the F.I.B.I. securities or the proceeds thereof for the purpose of securing
repayment of the loan in accordance with the loan agreement and the Bank of England
conditions and that the charge in favour of Lloyds was void.
Browne-Wilkinson J. held that the loan agreement constituted an equitable charge over the

6
F.I.B.I. securities in favour of the plaintiff bank; and that the *585 charge to Lloyds was illegal
and void for failure to comply with section 17 (2) of the Exchange Control Act 1947, no express
Bank of England consent to the charge having been obtained and the general consent given by
paragraph 87 of Bank of England Exchange Control Notice E.C. 7 being inapplicable by virtue
of paragraph 88 thereof. On appeals by Lloyds and I.F.T., the Court of Appeal allowed the
appeals.

Loan Investment Corporation of Australia v Bonner

The Privy Council refused Specific Performance for enforcement of an agreement of an

unsecured loan. The following distinguishing fact, and reasons, which can be found at pg 735 of
the opinion read by Lord Pearson, are noteworthy:

1. The loan in Loan Investment Corporation’s case was not intended to be secured by way of
mortgage;
2. The loan sought was not ancillary to the sale of land but was a principal transaction in itself;
and
3. The contract was predominantly in the nature of commercial bargain. The plaintiff wanted
the property not for their own use but for speculation - selling, letting, mortgaging and
perhaps developing and they wanted the loan to help in financing their business generally.

In such a case, as the Board found,

4. Damages would be an adequate remedy; and

5. There was a lack of mutuality: “The borrower obtains immediately the whole advantage of the
contract to him, namely the loan itself. The lender on the other hand has to wait and hope for the
payment of interest from time to time and for the eventual repayment of the capital. The Court
has means of compelling a party to pay a sum of money if he is able to do so. But no writ of
attachment or sequestration or other equitable process can compel the borrower to repay the loan,
if when the time comes at the end of the period he has not enough assets to enable him to do so.”

Wight v Haberdan Ltd.

The Plaintiff contracted to purchase from the first defendant (Haberdan) a 58 acre parcel of land.
The second defnedant agreed to grant the Plaintiff sought by court action to compel the second
defendant to provide the finance in time to complete the purchase. Kearney J. held that an
agreement for the loan of money could be enforced by specific performance: -
“In the present instance it is obvious that if the Plaintiff is left to pursue common law claims for
damages the most complex questions will arise. There will be necessarily difficult questions as to
the measure of damages and the remoteness of damage. There will be obviously great delay and
expense and at the end of the day the question what damages could be awarded would, in my

7
view, be extremely difficult, if not virtually impossible, to assess with reasonable accuracy…
…the complications involved in the Plaintiff being left to pursue a claim for damages in this
instance are so monumental and the prospects of an adequate recovery are so remote as to render
such a course an unjust imposition upon the Plaintiff…”

The court also reasoned that in a case of secured loan agreement the mortgagee, the lender, will
later be entitled to the property itself in satisfaction of his rights. It was further observed in
Wight’s case that where the known purpose of the loan is the acquisition of an interest in land, an
exception to the rule that damages would provide an adequate remedy.

Beswick v Beswick

SP was ordered of a contract to make a regular payment to the claimant for life. (page 22)

(D) Contracts Requiring Supervision Including Contracts to Build and to Repair

It is settled law that a court will not grant SP, where the order would require constant supervision
by the court. Equity does nothing in vain and will not issue orders which it cannot be certain to
enforce. The important question is whether there is a sufficient definition of what has to be done
in order to comply with the order of the court.

Ryan v Mutual Tontine

The authority in this case had been weakened by later decisions. The relevant questions were (a)
was there sufficient definition of what had to be done? (b) would an unacceptable degree of
superintendence be involved. (c) what would be the respective hardship to the parties if the order
was made or refused? The answer to these questions supported a grant of SP; the remedy of
damages was clearly inadequate.

Sky Petroleum Ltd v V.I.P. Petroleum Ltd.

An interlocutory injunction which was regarded as tantamount to SP was granted to enforce the
defendant’s obligation to supply petrol regularly to the claimant. In the related area of mandatory
injunctions the requirement of supervision has not been regarded as an insurmountable obstacle.

Co-operative Insurance Society Ltd v Argyll Stores

The question was whether SP should be granted of a covenant in a lease of a supermarket to keep

8
open during the usual hours of business. The supermarket had been trading at a loss and the least
had 19 years to run. The House of Lords, reversing the Court of Appeal, rejected the landlord’s
claim for SP, even though any damages would be difficult to quantify. Although, the breach was
deliberate, SO would be oppressive to the tenant, whose loss in complying might be far greater
than the loss to the landlord should the covenant be broken. The supervision principle remained
important.
The decision has been broadly welcomed in view of the undoubted difficulties with supervision,
but another view is that the HOL failed to liberalise the principles of SP and to grant effective
remedy to a landlord who was likely to be “short-changed” by any award of damages.

Wolverhampton Corporation v Emmons

A plot of land had been sold by an urban sanitary authority, in pursuance of a scheme of street
improvement, to the defendant, who agreed to erect buildings thereon and went into possession.
A later agreement provided for the erection of the buildings in accordance with detailed plans.
The COA, ordered SP.
This exception to the rule that the court does not order SP as a contract to build or repair is said
to be based on a “balance of convenience.”

Carpenters Estates v Davies

Farwell J held that it was sufficient that the defendant was in possession of the land, whether he
came in by the contract or not. After all, the defendant’s possession is the material factor; for the
claimant cannot then enter to perform the construction or repair work himself.

Giles v Morris

The court will specifically enforce an agreement to execute a contract, even if that contract itself
could not be specifically enforced. Quaere: Whether a perfected Chancery master's order can be
discharged on motion. Per curiam: (1) An agreement will be specifically enforced if only a small
part of it requires personal services. (2) The rule restricting specific enforcement of contracts
requiring personal services requires reconsideration. Defendants who had consented to an order
requiring the procuring by them of the entering into by a company which they controlled, of an
agreement (one part of which related to personal services), appealed against the order after it had
been perfected.
Summary: Held, that the appeal be dismissed.

(E) Contract for Personal Service

It is well established that contracts which are personal in nature or which involve the
performance of personal services will not be specifically enforced.

De Francesco v Barnum

9
Fry L.J states that the courts are bound to be jealous lest they should turn contracts of service
into contracts of slavery.

Giles v Morris

A distinction was drawn between the performance of a contract of service and the execution of
such a contract which provided for the claimant to be appointed managing director of a company
for a period of five years.

Hill v Parsons

The claimant was a senior engineer in the employment of the defendant. In May 1970 a trade
union successfully introduced a closed shop, under which it became a term of employment that
all the defendant’s employees were to be members of the union. The claimant refused and
received a month’s notice of dismissal. He obtained an interlocutory injunction restraining the
termination. Lord Denning states that it may be said that the granting of an interlocutory
injunction in such a case, the court is indirectly enforcing specifically a contract for personal
services.

Lumley v Wagner

Followed Hill v Parson (above), and granted an interlocutory injunction.

Stamp L.J dissented felt that the rule against SP of service contracts, while not without
exceptions, was deeply embedded in the law. The rule, he said, was a salutary one, which
benefited the employer and employee equally.

Posner v Scott-Lewis

SP was granted of a covenant in a lease to appoint a resident porter. It should not be assumed that
as soon as any element of personal service or continuous service can be discerned in a contract,
the court would always refuse an order. Notably in Beswick v Beswick, Lord Upjohn, said that a
small element of personal services in a contract did not warrant refusal for SP on the ground of
mutuality.

DEFENCES

1. Contract Unenforceable for want of writing

The Statute of Frauds enjoined the courts not to entertain any claim based on contract affecting
interest in land unless the contract was evidenced in writing. The aim was to prevent fraud and
perjury in relation to contracts for the transfer of land. It was thought that where a contract
affecting interest in land has been reduced into writing and signed by the party sued, the
possibility of denial of the existence of the contract would be reduced. Where the parties enter

10
into a contract without putting it into writing, the defendant can refuse to perform the contract
and rely on the absence of writing as his defence.

There are 2 situations in which specific performance may be granted notwithstanding the
absence of writing as required by the Statute of Frauds: -

(A) Part Performance - where there is sufficient acts of part performance

Madison v Alderson

Where the plaintiff has partly performed the contract the defendant is really ‘charged’ upon the
equities resulting from the acts done in execution of the contract, and not…upon the contract
itself…The matter has advanced beyond the stage of contract; and the equities which arise out of
the stage which it has reached cannot be administered unless the contract is regarded.

McCollin v Carter

The evidence led to establish acts of part performance must be cogent and indicate the existence
between the parties of a contractual relationship, which is “certain and definite in its terms”.

The counterclaim of the defendant for an order of SP in this case failed because there was no
reliable evidence to support the allegation that there was an agreement to sell the land to the
defendant. The plaintiff claimed that the defendant was his tenant of a house in St. George. The
defendant entered into possession of the land in order to get access to it, he employed Herbert
Puckering and Clarence Brewster to cut a gap to it. The plaintiff knew of these acts of the
defendant, to whom he admitted giving permission to ‘dig a hole for waste water’. The hole was
well used for the defendant’s toilet and bath. But the plaintiff denied that these acts were
performed in pursuance of an oral agreement for the sale of the land, as alleged by the defendant.
Douglas J. held “that on the defendant’s own showing, the agreement nor undertaking about the
payment off of the debt encumbering the land, nor was the area of the land specified to any
degree of certainty…. nor the price to be paid”.

It would have been better for the decision McCollin v Carter to have been based on the simple
ground that there was no proper parol evidence to establish the alleged contract than the view
“that the defendant’s entry into possession and the execution of works on the land is
‘unequivocally referable to some contract between the parties”. For such acts have been held to
be sufficient acts of part performance.

Chaproniere v Lambert

Absence of fraud in the defendant has been assigned as one of the reasons for not allowing the
doctrine of part performance where the act performed by the plaintiff consists only in the
payment of money to the defendant.
Warrington L.J. “for that reason the payment of purchase money alone is not sufficient to

11
exclude the statute, because if the contact is not performed the purchase money may be
recovered back by action.”
It follows that if the acts relied on are the acts, which were performed by the defendant and not
by the plaintiff, the doctrine cannot be invoked. For the plaintiff will not be defrauded if he can
only point to material prejudice suffered by the defendant and not himself. It should be noted that
there are acts, which by their very nature are reciprocal.

The acts executed in pursuance of the contract should be referable to a contractual relationship
existing between the parties. The requirement of referability is considered to be necessary as the
partly performed acts used to serve as a substitute for the written evidence required by the Statute
of Frauds.

(Test 1)
Warrington L.J. that the alleged facts should be referable to the contract alleged “and to no
other title”, and that they should point to the very same contract as the plaintiff alleged”. But this
test of referability “to no other title” is so restrictive that it can be hardly be applied since it is
virtually impossible to get any acts which can be explained only as having been performed in
pursuance of a particular contract. This first test was discarded and considered by the Court of
Appeal in the case Kingswood Estate Co. Td. v Anderson as “a long exploded idea”.

Kingswood Estate v Anderson

An elderly lady lived for 45 years in the premises of the plaintiff company. The plaintiff’s
company wanted vacant possession of the premises in order to develop the property. The
company served notice on Anderson to quit. But the property was controlled by the Rent
Restriction Acts., and by the Rent and Mortgage Interest Restriction (Amendment) Act, 1993, the
service notice made Anderson qualify as a statutory tenant, who could not be moved out of the
premises except where an alternative accommodation had been found for her. To achieve this
end, Mr. Young, on behalf of the plaintiff company, agreed to grant and the defendant agreed to
accept a tenancy of the No. 46 Crescent Road, another property belonging to the defendant
company, for the term of her life and that of her invalid son and the life of the survivor at the rent
of 35 s per week inclusive of rates. The Plaintiff company, soon after the defendant had moved
into the new premises on the faith of this agreement, sought to evict her and the invalid son on
the ground that she was a weekly tenant entitled to no more than four weeks’ notice. In the
alternative it was argued that if there was nay such contract for a life tenancy, it was an oral
agreement on which no claim could be founded for lack of written evidence that there were no
sufficient acts of part performance which were explicable only in terms of an existing contract to
grant a life tenancy to take the case out of the Statute of Frauds.
That contention was tenable in the light of the test of Warrington, L.J. that the act relied upon as
part performance must be unequivocally referable to the title sought to be established and to no
other title. For moving from one premises to another on payment of rent on weekly basis “was as
referable to a weekly tenancy as to tenancy for life,” according to the counsel for the plaintiff. To
this contention, Upjohn L.J. retorted: “if you are right, you never could have part performance“.

12
The court of appeal unanimously rejected this narrow test and held that there were sufficient acts
of part performance to take the case of the defendant out of the statute. The court of appeal could
not imagine any better evidence of part performance than the fact of the tenant going into actual
occupation.

(Test 2)
The facts should indicate unequivocally the existence of a contract of the kind in dispute.

Anson on Contract - “the acts of performance relied upon must of themselves suggest the
existence of a contract such as it is desired to prove, although they need not establish the exact
terms of that contract.

It should be acts, which would not have been executed except where the plaintiff has reason to
believe that he was entitled to some interest in the property in relation to which the acts were
performed.

Note: - Madison v Alderson (previously on page 11)

All the authorities shew that the acts relied upon as part performance must be unequivocally, and
in their own nature, referable to some such agreement as that alleged.
The appellant was induced by a promise made by Mr. Alderson that he would devise to her a life
estate in his Moulton Manor Farm to serve Mr. Alderson as his housekeeper without wages for
many years, and to give up her prospects of getting married. Mr. Alderson made the will leaving
her a life estate in the Moulton Manor Farm as he had promised. But the will could not be
admitted to probate because it was not duly attested. After the death of Mr. Alderson, the
appellant brought an action against the estate of Alderson for the arrears of wages due to her.
The House of Lords held that even if there had been a contact and although the appellant had
wholly performed her part by serving till the death of Mr. Alderson without wages, yet her
service was not unequivocally and in its own nature referable to a contract of the kind alleged by
her.

By this test what is required to be proved by the acts performed in relation to the contract should
be acts, which point unequivocally to the existence of a contract of the type, alleged. It need not
“show the very same contract as the plaintiff alleged”. - Fry, Specific Performance. Thus if the
acts can equally indicate a contract for the sale of goods, it will not be sufficient to support a
contract for the sale of land. But since taking of possession relates to contract affecting interest in
land generally, it would suffice for the purpose of this test.

Wakeman v Mackenzie

A woman agreed to give up her rent-restricted flat and keep house for an elderly widower in
consideration of his oral promise to will his house to her. The court considered her action to be
sufficient part performance.

This case was distinguished by Lord Simon in the case of Re Steadman v Steadman, where

13
Lord Simon said that in Maddison the woman had no house of her own to give up.

(Test 3)
That the acts alleged should make it more probable than not that a contract exists between
the parties.
Fry - “such as must be referred to some contract, and may be referred to the alleged one…they
[must] prove the existence of some contract and [be] consistent with the contract alleged.

Steadman v Steadman

The husband was in arrears in paying his wife’s maintenance in a sum of 194 pounds. The
husband applied for a variation on the maintenance order and variation order, an agreement was
reached where (I) the wife was to surrender her interest in the property for 1500 pounds. (ii) that
the wife’s maintenance order should be discharged, (iii) the child’s maintenance order would
continue and (iv) that the arrears would be remitted except as to 100 pounds. The compromise
was reached and announced to the magistrates and the clerk obtained the wife’s confirmation of
the terms. The husband paid the 100 pounds, but the wife refused to make the transfer as agreed,
apparently because there had been an increase in the value of the matrimonial home.
House of Lords held that there was a sufficient act of part performance to take the “oral package
deal” out of the Statute of Frauds.
The majority agreed with Fry that the “acts in question be such as must be referred to some
contract, and may be referred to the alleged one”. There were expression of opinion in the
majority judgements which at best can be said to cast doubt on the second test originating from
Lord Selborne’s decision in Maddison v Alderson to the effect that the acts should be referable
to “some such agreement as the alleged”, which was applied by the minority to reject the claim
founded on part performance.
Lord Reid proceeded on the test that the acts must prove that “there must have been a contract”.
He was of the view that the other test, “some such agreement as that alleged”, is based on the
theory that the law of part performance is a rule of evidence and that, according to his Lordship,
that was “a fundamental departure from the true doctrine of part performance and it was not
supported by recent authorities such as Kingswood Estate Co. Ltd. V Anderson.

Sutton v Sutton

The test applied in this case appears to be consistent with the orthodox test. The court found that
there was a sufficient act of part performance on the wife’s part because the evidence showed
that her consent to the divorce petition had been tied to the agreement about the house and was
referable to it.

Note: -
 The second test, i.e., some such contract, is in tune with principle and should be accepted. It
provides a sufficient safeguard against the very mischief which was targeted by the Statute of

14
 Fraud.
 The third test, i.e., that the acts should refer to some contract is too wide and has the
tendency of rendering the statue nugatory. The third test as discussed in Steadman has been
criticised by Walton J. in the case of Re Gonin, who preferred the “traditional equitable
jurisprudence”, that is, that the acts should refer to some such contract.

Note: -
The fact should not relate only to acts required to be performed as contractual obligations
undertaken by the plaintiff. It suffices if it is permitted by the contract alleged.

 POSSESSION

Taking possession of property with the consent of the vendor is “the act of part performance per
excellence”. - Statute of Frauds pg. 256. Where the vendor delivers possession, which is taken by
the purchaser, the doctrine of part performance can be invoked. The entry should be with the
consent, but the vendor acquiesces in the entry and subsequent expenditure in repair and
improvements, the requirement of the doctrine will be satisfied - Hodson v Heuland.

 ALTERATION

Alterations and improvements effected on property of another is sufficient for the purpose of this
rule. But alterations and improvement made on ones own land will not suffice.

Rawlinson v Ames

The plaintiff contracted orally to let his flat to the defendant, subject to certain alterations agreed
to be effected by the plaintiff. During the time when the alterations agreed to be effected by the
plaintiff, the defendant visited the property and at his instance and requests further alteration was
carried out by the plaintiff. After all the alterations had been don’t, the defendant repudiated the
oral contract and claimed an action for specific performance would not lie against her because
the contract was no evidenced in writing. Romer J. held that the alterations effected at the
instance of the defendant were acts of part performance and that the plaintiff could obtain
specific performance to enforce the oral contract.

Phillips v Bisnott

The defendant claimed that between 1954 and 1958 she gave assistance to the deceased by
performing various domestic chores and that she entered into an agreement with the deceased
that she would pat the deceased during her life and to pay her funeral and testamentary expenses.
She also claimed that she openly exercised acts of possession over the land by entering and
reaping fruits of the land, to the knowledge of the plaintiff.
Court of Appeal: - “the entry into possession by the plaintiff under the agreement coupled with
his building on the land, would in my view, be sufficient acts of part performance to take the case

15
out of the statute, and the effect of this would be that the equitable interest in the land the statute,
and the effect of this would be that the equitable interest in the land would pass from Julia Keech
to the plaintiff from 1953...she was then only entitled to the bare legal estate, subject to the
equitable interest of the plaintiff, and as it is abundantly clear on evidence that the defendant had
notice of the plaintiff’s interest in the land, the conveyance to the defendant would be subject to
the equitable interest of the plaintiff.

 PAYMENT OF MONEY

If the acts consist of payment of money and nothing more, the doctrine cannot apply to take the
oral contract out of the statute.
Reasons for this: -

1. There would be no fraud committed as the money paid can be recovered.

2. Payment of money is not explicable on the supposition that a contract affecting interest in
land has been entered into.

Note: - payment of full purchase price of land will not, alone and by itself, suffice as an act of
part performance.

Jackman v Jones

Followed the decision in Steadman v Steadman to hold that the payment of the sum of $18,200
coupled with the delivery of possession of the house to the defendant constituted an act of part
performance.

2. Want of Mutuality

“As a rule, the court will not grant specific performance at the suit of one party when it could not
do so at the suit of the other.” – Snell’s Principle of Equity.

There has been some academic disagreement as to whether the requirement of mutuality is
satisfied at the date of the contract, or will it suffice that the remedy has become mutually
available by some later date?

Fry’s proposition is that the contract must be mutual when entered into. Ames on the other hand,
considered that equity will not compel specific performance by the defendant if, after
performance, the common law remedy for damages would be his sole security for the
performance of the claimant’s side of the contract.

The court has never applied such a rigid principle as Fry.

Hoggart v Scott

16
It was laid down that a vendor might obtain specific performance if he can show a good title at
the time of the hearing, even though he had none when the contract was made.

Wilkinson v Clements

That if the claimant has already performed services, he may enforce the contract. If the plaintiff
has performed those personal duties, or effected those repairs or building as required by the
agreement, he can obtain SP, against the defendant. This rule of lack of mutuality is so
overloaded with exceptions that Prof. Langdell is quoted by Ames: -
“The rule of mutuality of remedy is obscure in principle and in extent, artificial and difficult to
understand and to remember”.

Note: - the Court of Appeal in preference to Fry’s rule adopted the formulation of Ames.

Price v Strange

D contracted to grant an underlease of a flat to P, and the agreement contained an undertaking by

P to execute internal and external repairs. P did the internal repairs and was ready and willing to
complete the external; but D repudiated the contract, and did the external repairs herself. P sued
for SP of the contract to grant the underlease. D claimed P was not entitled to SP, because,
relying on Fry’s rule, there was no mutuality at the date of the contract: P’s repair obligations
were not specifically enforceable. It was held that Fry’s rule was wrong: the time for considering
mutuality was the date of the judgement. If by that time those obligations, which were not
specifically enforceable, had been performed. P could obtain SP.

The principle is that the court will not compel a defendant to perform his obligations specifically,
if it cannot at the same time ensure that any unperformed obligation of the claimant will be
specifically performed, unless, perhaps, damages would be an adequate remedy to the defendant
for any default on the claimant’s part. Sp, was accordingly, granted on terms that P should pay
compensation to D for the cost of the repairs done by D.

3. MISTAKE AND MISREPRESENTATION

A defendant cannot usually resist SP by alleging merely his own fault and mistake…nor on the
ground that he was mistaken as to the legal effect of the agreement, although unilateral mistake
may, in some circumstances, afford an answer to a claim for SP. Generally, equity will hold the
defendant to enforcement of his bargain unless it can be shown that this would involve real
hardship amounting to injustice.

Webster v Cecil

A, by letter, offered to sell some property to B. He intended to offer it at 2,250 pounds but by
mistake wrote 1,250 pounds. B agreed to but it at 1,250. A immediately gave notice of the error

17
and was not compelled to carry out the sale.
Tamplin v James

An inn was offered for sale, and was correctly described with reference to plans. At the rear of
the inn was apiece of land, not belonging to the vendors, and so not included in the sale, which
had commonly been occupied with the inn. The defendant knew the premises, but did not consult
the plans, and he agreed to purchase in the belief that he was buying both the inn and the land at
the rear. SP was ordered against him.

Malins v Freeman

Where an estate was purchased at an auction and the defendant bid under a mistake as to the lot
put up for sale. Sp was refused although the mistake was due entirely the defendant’s fault and
not in any way caused by the vendor; and the defendant waited until the auction was over before
declaring the mistake.

Note: - Where the mistake is in the written record of the contract. The claimant may obtain
rectification and SP in the same action.

4. DELAY

In equity, time is not held to be of the essence of a contract, thus SP may be ordered although the
contractual date for performance has passed. The fact that time is not of the essence in equity
does not negative a breach of contract in such a case. It means that the breach does not amount to
a repudiation of the contract. Thus the delaying party, although liable to damages, does not lose
the right to seek SP, nor will he forfeit his deposit, provided he is ready to complete within a
reasonable time. There is no statutory period or rule laid down as to what is meant as an
unreasonable delay. However, the subject matter is important.

Lazard Bros. & Co. Ltd. V Fairfield Property Co.

Claimant brought a claim 2 years after. Megarry V. -C said that if SP was to be regarded as a
prize, to be awarded by equity to the zealous and denied to the indolent, then the claimants
should fail. But whatever might have been the position over a century ago that was the wrong
approach today. If between the parties it was just that the claimant should obtain the remedy, the
court ought not to withhold it merely because he had been guilty of delay. There was no ground
here on which delay could properly be said to be bar to order of SP.

Williams v Greatrex

A delay of 10 years did not bar SP. But a significant factor there was that the transaction creating
the proprietary interest was not in issue. It is otherwise where the contract itself is disputed. In
such a case the doctrine of laches does apply.

5. HARDSHIP

18
SP maybe refused in the discretion of the court where it would cause unnecessary hardship to
either of the parties, or to a third party.

Patel v Ali

After the contract to sell a house the vendor had a leg amputated. She later gave birth to her 2 nd
and 3rd children. The purchaser obtained an order for SP, against which the vendor appealed on
the ground of hardship. She spoke little English and relied on help from nearby friends and
relatives, hence it would be a hardship to leave the house and move away.
Held: - that the court in a proper case could refuse SP on the ground of hardship subsequent to
the contract, even if not cause by the claimant and not related to the subject-matter. On the facts,
there would be hardship amounting to injustice, therefore the appropriate remedy was damages.

6. PUBLIC POLICY

The court will not order SP of a contract where the result would be contrary to public policy.

Wroth v Tyler

A husband, the owner of the matrimonial home, entered into a contract to sell with vacant
possession. Before completion, his wife registered a charge under the Family Law Act 1996. The
purchaser sued for SP, and failed on 2 grounds: -

1. The husband could only carry out his obligation by obtaining a court order terminating
the wife’s right of occupation and this would depend on the discretion of the court. He
had attempted to obtain the wife’s consent by all reasonable means short of litigation, and
it would be most undesirable to require a husband to take proceedings against his wife,
especially where they were still living together.

2. Nor could the purchasers get SP subject to the wife’s right to occupation. The husband
and daughter would remain liable to eviction by the purchasers, and the family would be
split up. The court would be slow to order SP in such circumstances.

7. PERFORMANCE IMPOSSIBLE

The defence rests on the principle that the courts of equity will not require that to be done, which
cannot be done.

19
Ferguson v Wilson

The Chancery Court refused SP against a company for the allotment of shares when at the time
the suit was filed all the shares had been allotted by the directors to other shareholders.

8. SPECIFIC PERFORMANCE AND THIRD PARTIES

Claims for SP are usually made between the parties of the contract. In such a case, all the parties
to the contract must be parties to the action. Other difficulties arise where the issue is between
assignees, or where the person to be benefited was not a party to the contract.

Beswick v Beswick

One Peter Beswick, a coal merchant who wished to retire, made an arrangement with his nephew
under which the business was transferred to the nephew, and the nephew promised to employ
Peter as consultant for a weekly wage, and after his death to pay Peter’s widow £5 per week for
her life. Payments were made to Peter during his lifetime , but soon after his death ceased to be
paid to his widow. The widow took out letters of administration of Peter’s estate and sued both as
administratrix and in her own right under the contract.
The House of Lords held that she was entitled as administratrix to SP of the promise to make the
weekly payments to her as Peter’s widow. She was unable to sue in her own right because of the
rule of privity.

Difficulties that the widow in her action as administratrix faced: -

A. Peter’s estate, which she represented, had lost nothing by the breach
B. The widow, in her own capacity had suffered loss but no right of action
C. The agreement was for the payment of money and was not the type of agreement where
breach is usually remedied by an order of SP.

Lord Upjohn: - “the court ought to grant SP; more because damages are nominal.” she had no
other effective remedy: “justice demands that [the promisor] pay the price and this can only be
done in the circumstances by equitable relief.” This disregards the principle that equitable
remedies are available where the legal remedy is inadequate to compensate for the loss. It is not
that equitable remedies are available where the claimant has suffered no loss, nor where an
independent person has suffered a loss for which there is no cause of action. Thus the remedy of
damages is inadequate if it will lead to unjust enrichment of the wrongdoer.

Beswick v Beswick indicates a willingness in the House of Lords to make freer use of the
remedy in the interests of justice. The case is however concerned with its own particular
problem, now resolved by legislation, i.e., Contract (Rights of Third Parties) Act 1999.

20