Contracts which cannot be specifically enforced :
Section 14 lays down the contracts which cannot be specifically enforced. They are (a) A contract for the nonperformance of which compensation in money is an adequate relief; (b) A contract which runs into such minute and numerous details that the Court cannot enforce specific performance of its material terms or which is dependant upon the personal qualification or volition of the parties or a contract from its nature is such that the Court cannot enforce specific performance; (c) A contract which is in its nature determinable; (d) A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise. Sub-section (2) lays down that save as provided by the Arbitration Act, 1943, no contract to refer present or future difference to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions for the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such a contract shall bar the suit.
Sub-section (3) lays down that notwithstanding anything contained in clause (a) or clause (c) or clause (d) of Sub-section (1), the Court may enforce specific performance in the following cases: (a) where the suit is for the enforcement of a contract—(i) to execute a mortage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once; provided that where only a part of the loan has been advanced the vendor is willing to advance the remaining part of the loan in terms of the contract; or (ii) to take up and pay for any debentures of a company; (b) where the suit is for (i) the execution of a formal deed of partnership, the parties having commenced to carry on the business, or (ii) the purchase of a share of a partner of a firm (c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land provided that the following conditions are fulfilled, namely, (i) the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the land on which the building is to be constructed or other work is to be executed.
Illustrations
A contracts to sell and B contracts to buy, one lakh of rupees in the four per cent Central Government loan; the contract may be specifically performed.
A contracts to render personal service to B or A contracts to marry B or A contracts to employ B on personal service or A, an author, contracts with B, a publisher to complete a literary work. B cannot enforce specific performance of these contracts. Not only contract of personal service, but any contract requiring personal skill, knowledge or volition of the parties, for example, to marry, to paint a picture, to complete a literary work or to sing or act at a theatre will not be specifically enforced as such contracts would require a constant and general superintendence as cannot be conveniently undertaken by a Court of Justice.
A and B contract to become partners, the contract is not specifying the duration of the proposed partnership. In such a case the contract cannot be specifically enforced since, either A and B might at once dissolve the partnership (Scott v. Rayment (1868) L.R. 7 Eq. 112).
The Court will not decree specific performance of an agreement if it be of such a nature that better justice will be done by leaving the parties to their remedy in damages (Wilson v. Northampton & Banbury Junction Rly. Co. (1874) 9 C.H. App. 279).
In such a case pecuniary compensation is equated with the specific performance of the contract. It can be decreed only when the remedy at law is not adequate or is defective. The court may come to the conclusion that the ends of justice will be served better by awarding the damages instead of the specific performance of the contract.
A Contract may be specifically enforced:
(a) If it is one for non-performance of which the mere payment of money would not be an adequate relief; and
(b) the contract is otherwise, proper to be specifically enforced. Section 14(1)(b) provides three reasons for refusing specific performance:
(i) When a contract runs into minute or numerous details; or
(ii) When a contract is dependent upon the personal qualification or volition of the parties; or
(iii) When the contract by nature is such that the Court cannot enforce, specific performance of its material terms.
In the same way, contracts of personal service cannot be specifically enforced. These contracts are based upon the personal relations of the parties. They require mutual trust and confidence of the parties. When the contract is for personal service, it requires some skill or talent or of some intellectual pursuit, and in that case a decree for its specific performance cannot be passed by the court, as it will never know if the decree has been truthfully and fully executed. The Court will refuse specific performance of a contract if it is of such a nature that the Court cannot enforce its specific performance.
Under Section 14(1)(c) contracts which are in their nature determinable cannot be specifically enforced.
The Court will not enforce a contract which is in its nature determinable by the defendant. Determinable contract is such a contract where one of the parties can put an end to it. So even if a decree is passed, the defendant by putting an end to the contract, will evade the decree. A and B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership can not be specifically performed, for if it were so performed, either A or B might at once dissolve the partnership.