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This article will enlighten you fully about the suit for specific performance. The article begins by discussing the meaning of contract, meaning of a specific performance, various features of suits or legal notice for specific performance.
The article further talks about the parties involved in a suit for specific performance of contract, specific performance when a contract of sale is breached. Lastly, the step by step procedure of sending a legal notice for specific performance or filing a specific performance suit is given.
For more adept legal help or information regarding suits or legal notices for specific performance, connect to us for an expert legal consultation.Specific Relief Act, 1963 was codified in India which deals with the remedies granted by the court at its discretion for the enforcement of individual civil rights. In case of breach of contract, generally the remedy given by the court is compensation or damage of the amount of loss suffered by the party.
For this, the party files a suit in the court of law. But, sometimes compensation doesn’t satisfy the plaintiff, so he may also ask for a specific performance relief.
A Contract is a written or verbal agreement that is legally enforceable in a court of law. Two or more parties enter into this for a particular purpose where both the parties assume a legal obligation that must be satisfied.
Specific performance is a remedy which the equity principle developed. A damaged party in a breached contract has an option to file for a suit for specific performance to compel the other party to perform that promise. For this to be possible, the contract must be of such a type where specific performance can be performed.
Yes, Specific Performance is a cause of Action. This is because, if a person is not able to perform as per his promises in a contract, then that will lead to a cause of action and the other party can file a suit against it in the court. The court will ask the defaulting party to perform that promise.
Both of them are remedies for a cause of action, but there is a difference in both of them. Specific Performance as a remedy is given by the court when the innocent party asks for it. The breaching party will do things as per their original requirements.
The court usually gives this when it thinks that a monetary compensation would not serve the party adequately. It is very common in sales contract, and is used when there is a contract involving the sale of something very unique, like a particular tract of land, a very rare heirloom, or any invaluable art work.
For Example: Ram is an art dealer. He acquires an ancient Dutch statue that he thinks belongs to Rob Voerman. Mohan makes an offer to buy this art. Two of them make a valid legal contract. Ram later decides to keep the statue for now. Mohan sues Ram for breach of contract.
The court decides that the statue is priceless and Mohan cannot acquire another comparable piece no matter how much money is paid by Ram as compensation. Therefore the court decides that Ram should comply with the terms of the contract, and sell the statue to Mohan for the price agreed between the two. This is called specific performance.
Injunction, on the other hand is a remedy that prohibits a party to do a particular act. So that basic difference between specific performance and injunction is that, specific performance orders a party to do something, and an injunction orders a party to refrain from doing something. The court usually orders it when the intention is to preserve the status quo in situations where any further act of any type would cause one party irreparable damage. There are two types of injunction; (i) Temporary injunction, and (ii) Permanent Injunction.
Temporary injunction is usually sought before the beginning of trial. Permanent injunction is issues at the end of trial as a part of the court’s final decision. Temporary and permanent injunction is ordered to prevent the destruction of a historic building, stop the infringement of any copyright, stop pollution in water supply etc.
In a case decided by the Supreme Court of India, it was held that plaintiff cannot claim reliefs of specific performance and permanent injunction in the same suit. The court gave the reason that the cause of action to claim relief of permanent injunction and specific performance are independent of each other, and one cannot claim both of them in the same suit.
You can sue for specific performance when there is a valid agreement to sell contract between the parties. Even if there is an unregistered agreement to sell suit for specific performance, it is also admissible in evidence for a specific performance suit. Another condition is that the party asking for specific performance must manifest that his conduct has been blemishless.
Damage cannot be ascertained – When damaged cannot be ascertained, because there is no basis of calculation, specific performance is the best remedy available.
Compensation not being an adequate relief – Court may not grant specific performance when the compensation is adequate. But if compensation is not adequate as it is hard to quantify it, then also specific performance is the best remedy available.
A damaged party in a contract can sue the other party who is breaching the contract for specific performance. A damaged party is one who was expecting an act on the part of other part. For example, in the selling of any property, construction of any house, performance in any show/concert, etc, if the damaged party can prove that no monetary compensation can be adequate for the damage incurred then the court will order for specific performance.
An agreement to sell is a contract entered into between the seller and the buyer of any property. In case the seller breaches the contract, then there can be two perspectives of this scenario: (1) From the seller’s perspective (2) From the buyer’s perspective.
In both the situations, the buyer and the seller should look carefully for relevant clauses in the contract. See for any conditions in which one of the parties can deny from making performance. If something happens or not happens, like grant of loan by the bank. There may be other conditions like, if the buyer’s condition does not satisfy the seller. Then he/she can revoke the contract later.
The buyer in the breach have different recourse, he/she can either take money damages, and can also claim for the refund of any deposits, other expenses etc. Also the buyer can compel the erring party to go ahead with the contract under specific performance.
A sale is incomplete till the buyer has made the full payment and the seller delivers the property to the buyer. It may also happen that the buyer steps backwards from the contract by not making the payment. In this case, the seller can also seek specific performance before the court.
Before coming to the conclusion that a seller can sue for specific, some conditions of the contract should be carefully checked. Like, the presence of an arbitration clause where arbitration shall be the method of dispute resolution. If there occurs any conflict or breach of contract.
The period of limitation for a suit for specific performance of a contract is three years. The limitation starts from the time when the performance was ought to be done by the buyer or the seller. In case no such date is fixed for performance by both parties, then the limitation starts from the time when the plaintiff has notice that performance was refused by the respondent and this notice is mandatory.
Filing a lawsuit for specific performance involves many steps:
Create a complaint – First, you should start by making a draft of your complaint in your defence in a suit for specific performance of a contract. In the complaint, you will identify yourself as plaintiff and the other party i.e. buyer/seller as defendant. You will also mention how the contract was breached and other facts. An adept lawyer can help you with the legal notice format of specific performance.
Decide the jurisdiction – You can’t file a complaint in any court. Therefore you should determine where the cause of action has occurred, and then file a suit in that city.
File your complaint – Make multiple copies of your complaint, and file the original copy with the court. You’ll also have to pay some filing fee with your complaint.
Serve notice to the defendant – The other party needs a notice for him/her to respond to the complaint. So, you have to summon the other party through the court.
Analyse the defendant’s response – After the notice is served, you will receive the defendant’s response within the prescribed time. The defendant will file an answer. Or he will respond to every allegation you made in your complaint. He will do this by whether admitting or denying or claiming insufficient knowledge to admit or deny.
Prepare for trial – After analysing the defendant’s response, you will prepare for the trial. You can request for any other information that you may require from the defendant, before heading for the trial.
Summary Trial – After receiving additional information, the defendant might file for summary judgment to end the litigation soon and rule in his/her favour.
Attempt to settle – If the judgements on suit for specific performance are negative and the summary trial doesn’t succeed, then you should try to settle the matter so as to avoid unnecessary costly trials. Defendant will also want to avoid unnecessary cost and will be inclined towards the settlement. You can also try mediation, where a neutral third party will sit with both parties so that they come to a conclusion. Parties can also try arbitration, where a judge-like third party will hear evidence from both parties. The arbitrator will give an opinion, and if both parties agree, they can make it binding.
Organise your evidence – You should organise your document and list of witnesses that will help you prove your allegation towards the defendant. You will give your contract as evidence, and you will be the witness of forming of contract.
Start of Trial – In the trial, you should question your witness, cross-examine the defendant’s witnesses, give your own testimony etc.
Judgment – The judge will give its final verdict that will be binding to both parties. The losing party has the option to file an appeal.
For more queries or confusion regarding legal notices or suits for specific performance, ask for expert legal advice from us now!
In order to not miss out on any information or compliance and to avoid delay in filing suit for specific performance, it is recommended to get in touch with a lawyer who is well- versed with such technicalities and knows the ground realities of it.
Written by: Pranjal Jain
National Law University Odisha, Cuttack (4th Year)