Indian Contract Act, 1872 and Specific Relief Act, 1963
What the exam tests
Contract questions test formation, free consent, legality, performance and breach; the Specific Relief Act tests when a court will decree performance rather than leave the plaintiff to damages. After the 2018 amendment the balance has shifted decisively towards the plaintiff.
Core rules
- Section 10 requires offer, acceptance, lawful consideration, capacity and lawful object; Section 2(h) defines a contract.
- A minor's agreement is void ab initio (Mohori Bibee v. Dharmodas Ghose), and restitution may still be ordered against him.
- Section 25 makes a written and registered agreement for natural love and affection enforceable without consideration, along with promises for past voluntary services and time-barred debts.
- Section 27 voids restraint of trade; Section 28 voids agreements restricting legal proceedings; Section 56 excuses performance on frustration, but not where the event is self-induced or foreseeable.
- Section 74 covers liquidated damages and provides reasonable compensation not exceeding the stipulated sum, without proof of actual loss (Fateh Chand v. Balkishan Das).
- Specific Relief Act Section 10 now makes specific performance the rule; Sections 14 and 16 list the bars, including the plaintiff's proven readiness and willingness; Section 20 provides substituted performance.
Worked example
X agrees to sell land to Y, receives earnest money, then sells to Z. Y sues for specific performance four years after the agreed date. Limitation is three years under Article 54 from refusal; the suit is barred. Had it been within time, Y must plead and prove readiness and willingness under Section 16(c), and the court would now grant the decree as a matter of course unless a Section 14 bar applied.
Traps
Treating time as always of the essence; forgetting that Section 74 requires no proof of loss but still demands a reasonable assessment; and presuming the court retains the pre-2018 discretion to refuse a decree arbitrarily.