Contracts cannot be Specifically Enforced

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Contracts cannot be Specifically Enforced

Introduction

The contracts specified in clause (a) to (h) of Section 21 cannot be specifically enforced. Specific performance is an equitable relief which is not granted as a matter of course or as a matter of right to the party seeking  such relief but in the discretion of the court to be exercised on the basis of established sound judicial principles and upon a consideration of all the circumstances of each particular case.

  Following are the cases in which contracts cannot be specifically enforced:

Clause (a): Adequate relief by compensation:

A contract the non-performance of which compensation in money is adequate relief cannot be specifically enforced. In this context the word “adequate” means adequate appearing to the court for some reason found as a fact. The granting of specific performance of a contract is a matter discretionary with the court. Whether in a given case pecuniary compensation is or in not adequate relief is a question to be determined by the court itself. In terms of the explanation to section 12 of the specific relief Act, the court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money.

Clause (b): Contract with numerous details:

 The details referred to in clause (b) must be in the contract itself. It will not be sufficient to bar a claim for specific performance if the terms of the contract are simple.

Clause of personal service:

A court will not make an order the effect of which is to enforce specifically a contract of personal service. Where rendering of personal services under a contract is dependent upon the volition of the parties or where the acts stipulated required special knowledge, skill, ability, experience or the exercise of judgment, discretion integrity and like personal qualities in short, whenever a performance according to the spirit of the agreement rests on the individual will and capacity of the contracting party, a court cannot direct specific performance of those duties for or on behalf of the contracting party.

Clause (c): Uncertainty:

Contract contemplated by S.21 (c) are such contracts, terms of which cannot be clearly ascertained by court i.e., vague or incoherent contracts. Uncertainty is a question of fact arising out of document and on oral evidence adduced.

An agreement saying that the property will be let on lease “subject to entering into a regular lease” is not a concluded agreement and cannot be specifically enforced.

Clause (d): Revocable contracts:

A contract which is its nature revocable cannot be specifically enforced by the court by the issue of a permanent injunction. For instance, an agreement between the parties to a suit that it may be decided on the statement made by the referee is by its nature revocable and there can be no specific performance of such an agreement.

Clause (e): Contract by Trustee:

No court of inquiry will grant specific performance where a trustee has entered into a contract for a lease which is in excess of his powers or has entered into a covenant for renewal which is ultravires. But it f the contract it not in excess of the powers of a trustee: Section 21(e) would not be attracted and the contract may be specifically enforced.

Clause (g): Continuous duty:

An agreement for the continuous performance of certain acts for a period of more than three years cannot be specifically enforced and no mandatory injunction can be granted in respect of it. Where agreement seemed to be in perpetuity for all times to come; generation after generation, such agreement which would cast duty of performance be period longer than three years could not be specifically enforced.

Clause (h): Subject matter ceased to exist:

Where the very document in which a contract in embodied has ceased to exist because it has been set aside by a court; the specific performance of the contract cannot be ordered.

Contract to refer to arbitration:

An agreement to refer to arbitration cannot be specifically enforced under Specific Relief Act. Where there is an agreement that future disputes should be referred to arbitration, the provision has not force and does not preclude a suit being brought without resorting to arbitration.

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