Code: Section 20 of The Specific Relief Act
20. Substituted performance of contract.
(1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.
Explanation of Section 20:
Section 20 of the Specific Relief Act allows the party suffering from a breach of contract to seek substituted performance of the contract through a third party or their own agency. This section aims to provide an alternative remedy when the original party responsible for performance fails to uphold their obligations. It also outlines the process to be followed and the limitations regarding compensation and specific performance.
Key Provisions:
- Substituted Performance (Subsection (1))
If one party breaches the contract by failing to perform their obligations, the non-breaching party has the option to have the contract performed by a third party or through their own agency. The non-breaching party can recover the costs and expenses incurred in the substituted performance from the party in breach. This remedy is available without prejudice to the provisions of the Indian Contract Act, 1872. - Notice Requirement (Subsection (2))
The party suffering from the breach must issue a notice in writing to the breaching party, giving them at least 30 days to perform their obligations under the contract. If the breaching party refuses or fails to comply with the notice, the non-breaching party may proceed with the substituted performance. However, the costs of such performance can only be recovered if the non-breaching party has had the contract performed through a third party or their own agency. - No Specific Performance After Substituted Performance (Subsection (3))
Once the party suffering the breach has had the contract performed by a third party or their own agency, they cannot claim specific performance of the contract against the party in breach. This prevents double relief — both the substituted performance and specific performance — for the same breach. - Claim for Compensation (Subsection (4))
Even though specific performance is not available after substituted performance, the party suffering the breach can still claim compensation from the breaching party. This allows the aggrieved party to recover financial damages for the breach.
Illustration:
Example 1: Substituted Performance Through Third Party
Alice and Bob have a contract where Bob is supposed to deliver a set of furniture to Alice by a certain date. However, Bob fails to deliver on time. Alice gives Bob a 30-day notice requesting performance, but Bob does not respond. Alice then hires a third party to complete the delivery of the furniture. Alice can recover the costs incurred from Bob for hiring the third party. However, Alice cannot seek specific performance of the contract from Bob anymore, as the contract was already substituted.
Example 2: Claiming Compensation After Substituted Performance
Daniel enters into a contract with Emma to paint his house. Emma fails to complete the job, and Daniel hires another painter to finish the work. Daniel can claim compensation for the additional cost incurred from Emma, but he cannot ask Emma to perform the contract (i.e., finish painting) through specific performance.
Common Questions and Answers on Section 20:
1. Can I hire a third party to perform a contract if the other party breaches it?
Yes, under Section 20, you have the option to hire a third party or use your own agency to perform the contract if the other party breaches it, provided you give them a written notice giving at least 30 days to perform.
2. Do I need to notify the other party before hiring a third party?
Yes, you must notify the breaching party in writing, giving them at least 30 days to perform. Only after their refusal or failure to perform can you proceed with substituted performance.
3. Can I claim specific performance if I have already had the contract performed by a third party?
No, if you have already had the contract performed by a third party or your own agency, you cannot claim specific performance of the contract from the breaching party.
4. Can I still claim compensation from the breaching party?
Yes, even if you choose substituted performance, you can still claim compensation for any additional costs incurred due to the breach.
Conclusion:
Section 20 of the Specific Relief Act provides an important remedy for parties who have suffered from a breach of contract. It allows them to have the contract performed by a third party or their own agency and recover the related costs. However, the section also specifies that specific performance cannot be sought after substituted performance, though compensation for losses is still available.
