Specific Performance - Definition - Law Dictionary Home Dictionary Definition specific-performance

Definition :

Specific performance. Equity, in obedience to the cardinal rule of natural justice that a person should perform his agreement enforces, pursuant to a regulated and judicial discretion, the actual accomplishment of a thing stipulated for, on the ground that what is lawfully agreed to be done ought to be done, and that damages at law for breach of the contract are not a sufficient com-pensation. The Common Law has not recognized this principle; it has only given damages to a suffering party for the non-performance of an executory agreement. The (English) C.L.P. Act, 1854, however, imparted to the Common Law writ of mandamus a little more efficacy by provisions since superseded by s. 24 of the Judicature Act, 1873, now by Judicature Act, 1925, s. 36, and the (English) Mercantile Law Amendment Act, 1856, introduced a procedure for enforcing the specific delivery of goods sold, specially superseded by s. 52 of the (English) Sale of Goods Act, 1893.

An award of damages may be combined with a decree for specific performance by s. 24 of the (English) Judicature Act, 1873. (see now Judicature Act, 1925, s. 36)

By s. 49, (English) Law of Property Act, 1925, where the Court refuses to grant specific performance of a contract the Court has power to order the repayment of any deposit.

The board general rule is that contract relating to the sale or lease of land will be specifically enforced, but not contracts relating to personal property except under very special circumstances, as where damages do not afford an adequate remedy. The Court will not decree specific performance of a contract of personal service, but it will enforce a negative covenant by injunction if damages are not an appropriate remedy, Warner Brothers' Pictures (Inc.) v. Nelson, (1937) 1 KB 209.

The several requisites of a contract, which will be directed to be specifically executed, are these:-

(a) The contract must be entered into by competent parties, or their lawfully authorized agents. The general rule is, that all parties who can bind themselves at law are competent to enter into agreements, which equity will enforce.

(b) The parties must contract willingly, without undue bias, and not under any improper influence.

(c) The terms of the contract must be understood by the parties without mistake or misapprehension, and must be certain and defined, importing a concluded agreement, See Douglas v. Baynes, 1908 AC 477.

(d) The contract must be entered into for a valuable executory consideration, such as marriage or money; and not for a merely good consideration, how meritorious soever it may be.

(e) While a valuable consideration exists on the one side, there must be a promise or sale on the other, together with a mutuality of remedy between the parties. In other words, there must be some inducement passing from one party in order to render binding the promise of the other.

(f) The contract must be in writing if so required by the Statute of Frauds. See Law of Property Act, 1925, s. 40, replacing s. 4 of the Statute of Frauds.

Equity, however, will entertain actions for the specific performance of contracts which, though within the statute, have not been reduced into writing, where there does not appear any danger of fraud or perjury. The following contacts will be specially enforced:-

(1) A sale ordered by a decree of a Court, for the judgment of the court in confirming such a purchase takes the transaction out of the statute. It is, however, now usual for the purchaser to subscribe a written or printed contract.

(2) Where a parol agreement has been so substantially performed in part as to render it inequitable not to enforce the whole of it. See Maddison v. Alderson, (1883) 8 App Cas P. 473; and see now (English) L.P. Act, 1925, s. 40.

(3) Where the agreement has not been reduced into writing through the fraud of one of the parties.

(4) When the land is partnership property. Where a partnership, or an agreement in the nature of one, exists between two persons, and land is acquired by the partnership as a substratum of it, the land is in the nature of stock-in-trade of the partnership; and this being proved as an independent fact, the Court, without regarding the Statute of Frauds, will inquire of what the partnership stock consisted, whether that stock be land or any other kind of property.

(5) Where a suit is brought for the execution of a verbal agreement fully set forth in the plaintiff's claim, and the defendant puts in his answer or defence thereto, and confesses the agreement.

By the Judicature Act, 1873, s. 34 [see now (English) Judicature Act, 1925, s. 56 (1)], all causes and matters for the specific performance of contracts between vendors and purchasers of real estates, including contracts for leases, are assigned to the Chancery Division of the High Court of Justice. Specific performance may be obtained up to 500l. in the county courts under s. 52 (1) (d) of the (English) County Courts Act, 1934. See Fry on Specific Performance.

Specific performance is an equitable relief and he who seeks equity can be put on terms to ensure that equity is done to the opposite party even while granting the relief. The final end of law is justice, and so the means to it too should be informed by equity. That is why he who seeks equity shall do equity, K. Kalpana Sarsawathi v. P.G.S. Somasundram Chettiar, AIR 1980 SC 512 (513): (1980) 1 SCC 630.