Indian Contract Act, 1872 and Specific Relief
Contract questions favour the fault lines: what makes an agreement void, when does frustration excuse performance, how are damages measured, and when will a court decree specific performance.
Core rules
- Offer and acceptance must be unconditional and communicated (ss.2 and 4 to 7); consideration is defined in s.2(d), and s.25 lists exceptions, including natural love and affection, past voluntary service and time-barred debt.
- Free consent is negated by coercion (s.15), undue influence (s.16), fraud (s.17), misrepresentation (s.18) and mistake (ss.20 to 22).
- Void agreements: ss.24 to 30, including restraint of trade (s.27), wager (s.30) and restraint of marriage.
- Frustration under s.56 requires impossibility, not mere difficulty; s.73 codifies Hadley v. Baxendale; s.74 allows reasonable compensation, not the stipulated penalty.
- Specific Relief Act: after the 2018 amendment, s.10 treats specific performance as the general rule rather than a discretionary exception; s.14 lists contracts not enforceable (personal service, determinable contracts); s.16 requires readiness and willingness; ss.34, 37, 38 and 41 govern declarations, perpetual and mandatory injunctions, and refusal.
Worked example
A contracts to sell a house to B for Rs.50 lakh and later refuses. B sues for specific performance, pleading continuous readiness and willingness and depositing the balance. The court finds the contract is not within s.14 and that damages would not be adequate; specific performance is decreed.
Traps
Section 74 is used to enforce a penalty in full; frustration is invoked for commercial hardship; s.16 readiness is not pleaded; and students forget that s.41(b) bars an injunction restraining a person from prosecuting a criminal proceeding.