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Specific Performance of Agreements (Short Notes)

June 11, 2021

By Y.Srinivasa Rao, M.A (English Lit.)., B.Ed., LL.M., Research Scholar in Law of Torts., Principal Senior Civil Judge.

Table of Contents:

  1. Specific Performance
  2. Specific Performance of Agreements
  3. The following parol contracts will, therefore, be specially enforced

Specific Performance:– Specific Perforamance 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 Saraswathi v. P.S.S. Somasundaram Chettiar, (1980) 1 SCC 630.

Specific Performance of Agreements — 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 indeed is, in its contemplation, considered as now done. 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 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. Equity, however, will entertain actions for the specific performance of contracts which are not reduced into writing, where there does not appear any danger of fraud or perjury.

The following parol contracts will, therefore, 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.

(3) Where the agreement has not been reduced into writing through the fraud of one of the parties, the agreement will be exempted from the operation of the statute and allowed to be proved by parol evidence. (4) Another case in which parol agreements are considered binding is 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, the case is thereby taken entirely out of the mischief intended to be prevented by the statute and there being no danger of perjury, the Court will decree a specific performance.

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