Specific Performance of Contracts: Law After the 2018 Amendment

What is Specific Performance?

Specific performance is a court order requiring a party who has breached a contract to fulfil its specific contractual obligation, rather than merely paying damages. It is governed by the Specific Relief Act, 1963 ("SRA"), as amended by the Specific Relief (Amendment) Act, 2018.

The Old Law: Discretionary Remedy

Under the unamended SRA, specific performance was a discretionary remedy. Courts could refuse it if they concluded that damages would be an adequate remedy. In practice, this meant that in many contract disputes — particularly involving movable property or commercially fungible goods — courts routinely refused specific performance.

The 2018 Amendment: A Paradigm Shift

The Specific Relief (Amendment) Act, 2018 came into force on 1 October 2018 and made three major changes:

1. Specific Performance Now Ordinarily Granted

The amendment substituted Section 10 of the SRA to provide that specific performance of a contract shall be enforced by the court subject only to the provisions of the Act. The old discretionary language was removed.

This means:

• Courts can no longer refuse specific performance merely because damages would be adequate
• The onus has shifted — a party resisting specific performance must bring itself within the exceptions

2. Substituted Performance

A new Section 20 was introduced allowing the injured party to get the contract performed by a third party at the cost of the defaulting party. This is an important practical remedy — the project gets done, and the defaulter bears the cost.

3. No Injunction in Infrastructure Projects

A new provision prohibits courts from granting injunctions that would impede or delay completion of infrastructure projects. This was a significant policy change aimed at facilitating infrastructure development.

Exceptions: When Specific Performance Is Not Granted

Even after the amendment, specific performance is not granted where:

• The contract is not enforceable at law (e.g., it lacks consideration or consent)
• Compensation in money is an adequate remedy (still applicable to some contracts)
• The contract involves personal service
• Performance would be inequitable or impossible

Practical Impact

The 2018 amendment has been significant in:

• Real estate transactions: Buyers can now more readily enforce sale agreements
• Long-term commercial contracts: Parties can seek actual performance, not just damages
• Infrastructure contracts: Substituted performance gives a practical way to complete projects

Key Conditions for Obtaining Specific Performance

1. The contract must be valid and enforceable
2. The plaintiff must have performed or be willing to perform their part
3. The plaintiff must not be in breach of a material term
4. Equity must not be against granting the relief

Conclusion

The 2018 amendment has made specific performance the rule rather than the exception. This is a welcome development for contracting parties — particularly in real estate and infrastructure — who seek certainty about enforcement of their agreements.