Specific Performance of Contracts MCQ Quiz - Objective Question with Answer for Specific Performance of Contracts - Download Free PDF

The correct answer is Option 4.

Key Points

• Section 16 of the Specific Relief Act, 1963 outlines personal bars to relief in cases of specific performance. According to this section, specific performance of a contract cannot be enforced in favor of a person who fails to prove that he has performed or has always been ready and willing to perform the essential terms of the contract that are to be performed by him.

• Option 1) Section 13 is incorrect. Section 13 deals with the conditions for granting specific performance but does not address the readiness and willingness of a party to perform the contract.

• Option 2) Section 14 is incorrect. Section 14 deals with the contracts that cannot be specifically enforced, such as contracts for personal services, contracts that are impossible, etc.

• Option 3) Section 15 is incorrect. Section 15 addresses contracts that are already performed and the court's discretion in granting specific performance.

Additional Information

• The readiness and willingness of the plaintiff to perform their part of the contract is a crucial element in a suit for specific performance. The court will only enforce specific performance if the plaintiff has shown that they have not only intended to perform but have also been ready to do so at all times.

The correct answer is shall be pleaded in the plaint and proved. 

Key Points

• Under Section 16(c) of the Specific Relief Act, 1963, even after the 2018 Amendment, the requirement that the plaintiff must plead and prove their readiness and willingness to perform their part of the contract remains intact.
• The 2018 Amendment removed discretion in granting specific performance in many cases, but did not alter the requirement under Section 16(c).
• The section still mandates that in order to obtain a decree of specific performance, the plaintiff must aver (plead) and must prove that they have always been ready and willing to perform their part of the contract.

The correct answer is Option 4.

Key Points

Under Section 15 of the Specific Relief Act, 1963 (India), the right to obtain specific performance of a contract belongs to several categories of persons, including:

1. Any party to the contract (Section 15(a)).
2. A reversioner in possession where the agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant (Section 15(c)).
3. Any person beneficially entitled under a marriage settlement (Section 15(d)).

Since the question lists each of these as separate options and asks who may obtain specific performance, the correct choice is that all of the listed categories (Options 1, 2, and 3) can do so. Hence, the correct answer is:

Option 4) All of these options.

The correct answer is 'OPTION 2.'

Key Points

• Understanding Section 21 of the Specific Relief Act, 1963:
  • Section 21 of the Specific Relief Act, 1963 deals with the awarding of compensation in cases involving specific performance of contracts.
  • It allows the court to award compensation to the plaintiff even if specific performance is not granted, provided the compensation is claimed in the suit.
  • The primary condition is that the plaintiff must have explicitly claimed compensation in the original suit.

Additional Information

• Examining other options:
  • Compensation can only be awarded in those matters, where specific performance is not granted: This is incorrect because compensation can be awarded irrespective of whether specific performance is granted or not, as long as it is claimed.
  • The compensation cannot be awarded, where, the contract has become incapable of specific performance: This is incorrect because compensation can still be awarded even if the contract cannot be specifically performed, provided it was claimed.
  • If the plaintiff has not claimed the compensation at the time of filing of the suit, he cannot amend his plaint, demanding compensation: This is incorrect as the court may allow the plaintiff to amend the plaint to include the claim for compensation, subject to certain conditions.

The correct answer is option 1.Key Points

• Section 14 of Specific Relief  Act 1872 deals with Contracts not specifically enforceable.
• The following contracts cannot be specifically enforced, namely:
  • (a) Where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20;
  • (b) A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;
  • (c) A contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and
  • (d) A contract which is in its nature determinable.
• A contract for the non-performance of which compensation is not an adequate relief then the contract can be specifically enforced.

The correct answer is Section 12 

Key PointsSection 12 of the Specific Relief Act outlines the principles governing the specific performance of part of a contract:

• General Rule: The court typically does not direct the specific performance of a partial contract.
• Exception for Small Proportions with Compensation: If a party cannot fulfill the entire contract, but the unfulfilled part is of small value and can be compensated with money, the court may, upon the request of either party, enforce specific performance of the performable portion and award compensation for the rest.
• Limitations on Unfulfilled Parts: If the unfulfilled part:
  • Constitutes a significant portion, but compensation in money is possible, or
  • Does not allow for compensation in money, the court will not decree specific performance. However, the court may, upon the request of the other party, direct the defaulting party to specifically perform the feasible portion under certain conditions.
• Separate Treatment for Independent Parts: If a part of the contract, capable of specific performance on its own, is distinct from another part that cannot or should not be specifically performed, the court may order specific performance of the former part.

The correct answer is Both 1 and 2

 Key PointsSection 22 - Power to grant relief for possession, partition, refund of earnest money, etc. Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for

(a) possession, or partition and separate possession, of the property, in addition to such performance; or

(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or 1[made by] him, in case his claim for specific performance is refused.

The Correct answer is Section 15

Key PointsExplanation: Section15. Who may obtain specific performance.—Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by—
(a) any party thereto;
(b) the representative in interest or the principal, of any party thereto:

Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the reminderman;
(e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach;
(g) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(h) when the promoters of a company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms of the incorporation, the company:

Provided that the company has accepted the contract and has communicated such acceptance to the other party to the contract.

correct answer is Non-enforcement except with variation

 Key PointsSection 18 Non-enforcement except with variation.—Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases, namely:—
(a) where by fraud, mistake of fact or misrepresentation, the written contract of which performance is sought is in its terms or effect different from what the parties agreed to, or does not contain all the terms agreed to between the parties on the basis of which the defendant entered into the contract;
(b) where the object of the parties was to produce a certain legal result which the contract as framed is not calculated to produce;
(c) where the parties have, subsequently to the execution of the contract, varied its terms.

The correct answer is option 1.Key Points

• Section 14 of Specific Relief  Act 1872 deals with Contracts not specifically enforceable.
• The following contracts cannot be specifically enforced, namely:
  • (a) Where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20;
  • (b) A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;
  • (c) A contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and
  • (d) A contract which is in its nature determinable.
• A contract for the non-performance of which compensation is not an adequate relief then the contract can be specifically enforced.

The correct answer is Option 3.

Key PointsSection 20 in The Specific Relief Act, 1963:- Discretion as to decreeing specific performance.—

(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.
(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:—

• (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
• (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or
• (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation 1.—
Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).
Explanation 2.—
The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.

The correct answer is Option 3

Key Points

•  Section 16: Personal bars to relief:
  • This section lays down the conditions under which specific performance of a contract cannot be enforced.
  • If a person has obtained a substituted performance of the contract under Section 20, they cannot claim specific performance.
  • If a person becomes incapable of performing their part of the contract, violates any essential term of the contract, acts in fraud of the contract, or acts in a manner that subverts the relationship intended to be established by the contract, then they cannot claim specific performance.
  • Additionally, if a person has failed to prove that they have performed or are ready and willing to perform the essential terms of the contract which are to be performed by them, except the terms prevented or waived by the defendant, they cannot claim specific performance.
• Meaning of Specific Relief: Specific relief is a remedy that is specific to the subject matter of the dispute.
• It aims to restore the party to the position he or she would have been in if the contract or agreement had been performed as agreed.
• It may involve compelling a party to carry out their contractual obligations or restraining them from committing a wrongful act.

Additional Information

•  The Meaning and nature of Specific relief also covers the following points:
  • Specific Performance: Specific relief may involve the court ordering the performance of a specific act as required by a contract or legal obligation.
  • Injunctions: Specific relief can also include the issuance of injunctions, which are court orders that prohibit a person from doing a particular act.
  •  Discretionary Remedy: Specific relief is a discretionary remedy, meaning that the court has the discretion to grant or deny it based on the circumstances of each case.
  • Alternative to Damages: Specific relief is an alternative to monetary damages and aims to restore the parties to their original positions.
• Section 15: Who may obtain specific performance:
  • This section explains who can obtain a specific performance of a contract under the act.
  • Any party to the contract can obtain specific performance, as well as their representative or principal, unless the contract explicitly states otherwise.
  • However, if the personal qualities of a party are a material ingredient in the contract or the contract forbids assignment of the interest, then the representative or principal cannot claim specific performance unless the party has already fulfilled their part of the contract, or the other party has accepted the performance from the representative or principal.
  • In some specific cases such as settlement on marriage, compromise of doubtful rights between members of the same family, a tenant for life in exercise of power, reversioners in possession or remainder, and limited liability partnership or company after amalgamation, specific performance can be obtained by other parties as well.

The correct answer is Option 2.Key Points Section 12 of the Specific Relief Act 1963, provides for the Specific performance of part of contract.

It states that —

• (1) Except as otherwise hereinafter provided in this section, the court shall not direct the specific performance of a part of a contract.
• (2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed be a only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.
• (3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either—
  • (a) forms a considerable part of the whole, though admitting of compensation in money; or
  • (b) does not admit of compensation in money; he is not entitled to obtain a decree for specific performance; but the court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party—
    • (i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and in a case falling under clause (b) pays or has paid the consideration for the whole of the contract without any abatement; and
    • (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.
• (4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part.

Explanation.—For the purposes of this section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject-matter existing at the date of the contract has ceased to exist at the time of its performance.

The correct answer is plaintiff's capacity including financial.

Key Points

• Section 16 provides for Personal bars to relief.
• It states that —Specific performance of a contract cannot be enforced in favour of a person—
  (a) who has obtained substituted performance of contract under section 20; or 
  (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
  (c) who fails to prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
  Explanation.—For the purposes of clause (c),—
  (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
  (ii) the plaintiff must prove performance of, or readiness and willingness to perform, the contract according to its true construction.