How to cite this paper: Kanamugire, J. C. (2015). Vendor and Purchaser - contract of sale - oral agreement - specific performance - adequacy of damages. Specific performance is equitable relief, given by the court to enforce against a defendant, the duty of doing what he agreed by contract to do. Specific performance is one of the options available when monetary compensation is not sufficient to put the plaintiff in the same position as he or she would have been if the breach did not occur. There is no guarantee that the court will award specific performance. There are express statutory provisions that allow the court to exercise its discretion to grant specific performance for contracts for the provision of goods and services. Everything You Need to Know. Specific performance will be supervised constantly. © 2020 Spevack Law Firm. All rights reserved. Contract law has two methods of achieving this "compensation goal": requiring the breaching party to pay damages, either to enable specific performance of a contract - Section 10 of Indian Contract Act, 1872 - Section 15 of the Specific Relief Act, 1963 - Case Laws Specific performance is a very complex area of law, and there are many circumstances which prevent the court from making such an order, including: Where damages are sufficient: A court will only make an order for specific performance in circumstances where an award of damages would be insufficient. Facts. For example, say a construction company is required to build a building to a height of 40 feet. Because of the principle of equity, courts generally prefer to award damages rather than enforce contractual provisos. These unique qualities are considerations that the buyer and seller must make when they are pricing the land, negotiating the price, and agreeing on the final price. For example, if A agrees to sell certain shares to B of a specific company which are limited in number and after the payment made by B, if A refuses to sell the shares then B is entitled to recovery of those shares. The representative-in-interest, or the principal, or any party thereto excepting where the earning skill, solvency or any personal quality of such party is a material ingredient in the court. Section 27 of Indian contract Act says that The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or any other law. The Model Law similarly omits any reference to specific performance but, to avoid any doubt, s33A provides that, unless otherwise agreed by the parties, the arbitrator has power to make an award ordering specific performance of any contract if the Court would have power to award specific performance of that Contract. 2d Specific Performance § 133 (2014) (hereinafter Specific Performance). The grant of relief of specific performance is a discretionary and equitable relief. Want High Quality, Transparent, and Affordable Legal Services? In many situations, specific performance does not adequately compensate the innocent party for his or her loss or injury. Specific performance is an alternative equitrable remedy to a cause of action for breach of contract. Specific performance is referred to under the law as an equitable remedy. Hire the top business lawyers and save up to 60% on legal fees. Overview. Beswick v Beswick [1968] AC 58. See Dawson, Specific Performance in France and Germany, 57 MICH. L. REV. The buyer must tender the purchase price in order for specific performance to be granted. But something goes wrong during construction and, in the end, the building comes out to 35 feet. It can come in the form of any forced action but usually involves performing previously agreed-upon tasks. Legality – The terms of the contract may not be prohibited the law and should not be contrary to public policy. ¶0 1. What kinds of remedies exist for the party who suffers as a result of a contract breach? An extraordinary equitable remedy that compels a party to execute a contract according to the precise terms agreed upon or to execute it substantially so that, under the circumstances, justice will be done between the parties. Specific Performance. Contract law is a body of law that governs, enforces, and interprets agreements related to an exchange of goods, services, properties, or money. Placer Development Ltd v Commonwealth [1969] HCA 29; (1969) 121 CLR 353 (High Court) Certainty . Vendor and Purchaser - contract of sale - oral agreement - specific performance - adequacy of damages. If one of the parties does not honor the contract by breaching the terms of the contract, the harmed party often does not want money damages but instead wants actual performance of the terms of the contract. Specific performance is used by the courts instead of compensatory damages when no other remedy will adequately compensate the other party. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. Keywords: Breach of Contract, Judicial Discretion, Specific Performance, Damages. The party on whom this contractual obligation rests must not fails to discharge such obligation. The most common reason courts grant specific performance is that the subject of the contract is unique, when it's not merely a matter of money or where the true amount of damages is unclear. Specific performance as a primary remedy in the South African law of contract. The Case for Specific Performance Alan Schwartzt The purpose of contract remedies is to place a disappointed promisee in as good a position as he would have enjoyed had his promisor per- formed.' Specific performance is a remedy sought in civil court, instead of money. Specific performance can be granted only by a court in the exercise of its EQUITY powers, subsequent to a determination of whether a valid contract that can be enforced exists and an evaluation of the relief sought. But something goes wrong during construction and, in the end, the building comes out to 35 feet. A suit for specific performance can be filed by any party, in a court of competent jurisdiction, who has suffered loss due to non-performance of contract on part of the other party to the contract. The action is usually one that has been previously detailed in a contract. One such remedy is known as specific performance. This field is for validation purposes and should be left unchanged. ¶0 1. Under such a circumstance, the court will rarely award specific performance, even if monetary damages are not an adequate compensation. If you or your business have suffered as a result of a broken contract, our business litigation attorneys are prepared to assist you in seeking the remedy you desire. It encompasses the idea that all parties to a contract are bound by the exact terms stated in that contract and that there are remedies that a wronged party can pursue when someone is in breach of those terms. Pirie v Saunders (1961) 104 CLR 149; [1961] HCA 4 Formalities - oral agreement - authenticated signature fiction . When specific performance would place undue burden on the defendant, When a contract stipulates that either party can renege without notice, When mutuality was lacking when the contract was signed, When the contract required constant supervision. Professor Dawson, however, did not deal with efficiency objections to the wider 30 Falcke v Gray allowed the defendant to escape the contract without apparent penalty as the order of specific performance was dismissed without costs and there was no discussion of the damages to be awarded in its place. Specific performance was refused by High Court by determining the agreement of sale as invalid, on the ground that the provisions of Section 33 of Karnataka Co-operative Societies Act, 1959, invalidates such agreement of sale, because the suit properties were sub­ject to charge on the date of sale, since the seller had taken a loan on security of goods. If it is stated in the sale of land law, but otherwise not! With specific performance quotes from experienced lawyers instantly something goes wrong during construction and, in the end, other! Because each parcel of land is unique and monetary damages are not an adequate consideration for the aggrieved.... Conditions may also apply in addition to replevin under such a circumstance, the courts instead money... Act says specific performance is an action to essentially correct the breach of contract available for the contract not. An equitable remedy wish to obtain an injunction or seek monetary compensation, can not compensate other... 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