Contracts and Specific Relief: Formation, Breach, Damages and Performance
This domain covers formation, validity, discharge, breach and remedies, plus the Specific Relief Act, 1963.
Offer and acceptance
An offer must be communicated; acceptance must be absolute, unqualified, in the prescribed mode and communicated to the offeror. Consideration must be real and lawful; section 25 saves natural love and affection, past voluntary services and time-barred debts. Consent fails through coercion (s.15), undue influence (s.16), fraud (s.17), misrepresentation (s.18) and mistake (ss.20-22). A voidable contract is avoidable at the aggrieved party's option; a void agreement is unenforceable from the outset.
Discharge and breach
Performance, agreement, impossibility (s.56), operation of law, or breach. Anticipatory breach occurs on repudiation before performance is due; the other party may sue at once or wait, but waiting risks supervening events.
Damages
Hadley v Baxendale: losses arising naturally from the breach, or those in the contemplation of both parties at contract time. Mitigation is expected. Liquidated damages must be a genuine pre-estimate, else they are a penalty.
Specific Relief Act
Specific performance is discretionary but generally available (s.10, as amended in 2018). Section 14 lists non-enforceable contracts, including personal service; section 16 requires readiness and willingness; injunction under ss.36-42; declaratory relief s.34; rectification s.26; cancellation s.31.
Worked example
A agrees to sell an identified plot, receives payment, then refuses. Because the property is identified and damages are inadequate, specific performance under s.10 is appropriate, provided B pleads and proves readiness and willingness under s.16.
Traps
Absence of free consent makes a contract voidable, not void; past consideration is generally no consideration but section 25 exceptions apply; specific performance is not automatic merely because damages exist.