The Circumstances Under which a Decree in a Specific Performance Can Be Granted by a Court of Law.

 INTRODUCTION

Section 37(1) and (2) of The Law of Contracts Act  provides on obligations of parties to contracts which must be performed, the provisions of above section goes far to impose obligation to representative (s) of deceased original party (s) to a contract. Parties to the contract are required to perform their duties as agreed in a contract, failure or fault performance of a contract may led to civil claim against a party who breached a contract. Section 37(1) provides that, “The parties to  a contract must perform their respective promises, unless such performance is dispensed with or excused under the provisions of this Act or of any other law. (2)  Promises bind  the  representatives  of  the promisor in case  of the death of such promisor before performance, unless a contrary  intention appears from the contract.”

Section 73(1) of LCA  requires that, when a contract has been broken, the party who suffers by  such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from  such breach, or which the parties knew, when they made the contract, to be likely to result from  the breach of it. Compensation always be in form of money, unfortunately, not in all circumstances money can compensate damage, if it is determined by court that money alone cannot resolve the issue, the courts can order defendants in contract disputes to actually perform the contractual duties as originally agreed. This is called specific performance.

Specific performance is an equitable remedy available for breach of contractual duty. A decree by the court to compel a party to perform its contractual obligations. It may be granted in addition to or instead of damages. Unlike damages which are available as of right, specific performance is granted at the court’s discretion.  The court issues an order requiring a party to perform a specific act i.e. directs performing the contract as per the terms and conditions agreed between the parties rather than payment of compensation or damages for the non-performance of the contract. In other words, here the remedy provided is that plaintiff is granted the very same thing to which he is entitled, rather than money compensation in lieu thereof. It is based on the perspective that there might be situations wherein grant of compensation would not afford adequate relief and only specific performance of the contract would render justice and provide adequate relief.

In the case of Bahati Kachira v. Bundala Mihayo ,  the respondent Bundala Mihayo entered into land sale agreement with the appellant Bahati Kachila over a piece of land whose size was not been described in that alleged agreement, at the price of Tshs.500,000/=. Since he had no enough money to pay the whole purchase price, they agreed that he pay half of the amount which was Tshs.250, 000/=as first instalment. However, according to the piece of paper tendered at the Ward Tribunal as a contract for sale, there was no specific time frame fixed within which the remaining amount was to be paid, but it was according that piece of paper, to be paid on the date of the handing over of the land. This means the land was not handed over upon payment of the first instalment. On 08/02/2011 the respondent was arrested for a criminal offence and remanded for seven years, while in remand prison the respondent sent his relatives to go and pay the remaining balance of Tshs. 250,000/= to the appellant, but appellant refused to receive the money on the ground that he did not recognize those who went to pay him.

On 15/11/2017 the respondent was released from remand custody and went with the remaining balance of Tshs.250, 000/=to the appellant, but the appellant refused to receive the money on the ground that he did not recognize him, respondent filed application before Ludete Ward Tribunal in Geita District which he later won. Appellate appealed before District Land and Housing Tribunal for Geita which he lost either. He appealed before High Court where the court ordered him to either perform the contract or pay back the money received from respondent.

A suit for specific performance can be filed by any party in a court of competent jurisdiction, remedy of specific performance which is affected in case of breach of contracts can be provided by any competent tribunal or court. However, this cannot be asked for as a right because it is provided on the satisfactory discretion of the court. It is an alternative to awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning “confidential information” or “real property”. To sue successful while seeking special performance, a plaintiff must prove before court that he had performed his part of contract or was willing to perform his part of contract. The person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract which are to be performed by him so as to establish grounds for damages.

THE CIRCUMSTANCES UNDER WHICH A DECREE IN A SPECIFIC PERFORMANCE CAN BE GRANTED BY A COURT OF LAW.

The courts grants the relief of specific performance in the following situations-

If the compensation to be awarded cannot be determined. Remedy of specific performance is awarded in cases where it is impossible to ascertain compensation. In this case, the court directs the defendant to perform his promise in agreement as agreed at the time of making the contract. For-instance where A agree to buy, and B agrees to sell, a picture by a dead painter and two rare China vases, A may compel B specifically to perform this contract, for, there is no standard for ascertaining the actual damage which would be caused by its non-performance.

Remedy of specific performance is awarded when there is no substitute or alternate for the subject matter of the contract. For-instance, A enter into a contract to buy B's house and B agrees to sale his house to A, later B refuses to transfer house to A as agreed. A may sue B for specific performance because there is no an alternative to a house purchased, in this situation, a court of law may order specific performance as there is no alternative to a contract subject matter.

Remedy of specific performance is awarded in case of goods, the value of which cannot be easily ascertained and the goods have a unique character. For example, buildings, land or goods having special value for the plaintiff. For instance, if a buyer purchases a famous art sculpture at auction, and does not receive the sculpture, the buyer may not be made whole by the return of his money, because there is only one such sculpture in the world for him to buy. Therefore a civil court may order the auction house to provide him with his sculpture or face penalty.

CONCLUSION

Remedy of specific performance is awarded at the sole discretion of the court. However, there are certain circumstances when this remedy cannot be awarded. For instance, when the specific performance is impossible, when the contract is too vague to be enforced, the contract was made for no consideration, when the contract is void or unenforceable. The court's power to grant specific performance is discretionary and based on justice, equity and good conscience. 

In Kanshi Ram Vs Omprakash Jawal & Ors AIR , where 100 square yard plot at Lajpat Nagar, Delhi was agreed to be sold for Rs 16000/- in 1970, Court after considering low price, passage of such long time and plaintiff's claim of compensation in the alternative, set aside decree of specific performance and instead directed compensation of Rs 10 lakhs.

Similarly, in Manoharlal vs Maya  relating to sale of large piece of agricultural land by poor farmer to commission agent of fertilizer at uneconomic price, where only Rs 2000/- was paid as earnest money, Agreement was proved. Yet Court held that it is not fit case for exercise of discretion and declined specific performance and passed decree for refund of earnest money.

REFERENCE

STATUTES

The Law of  Contract Act, [CAP. 345  R.E. 2019] S. 37(1) and (2).

CASE LAWS

Kanshi Ram Vs Omprakash Jawal & Ors AIR 1996 SC 2150

Similarly, in Manoharlal vs Maya 2003 AIR SCW 2362

Bahati Kachira v. Bundala Mihayo MISC. LAND APPEAL No.27 OF 2018

OTHER SOURCES

Thompson Reuters, “specific performance”, available at <https://uk.practicallaw.thomsonreuters.com/> (accessed 16 October 2021).