Section 20 of The Specific Relief Act, 1963
Substituted performance of contract
1, 2[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.]
Summary
- If a contract is broken due to non-performance, the suffering party has the option of substituted performance through a third party or by their own agency.
- The suffering party can recover all actual expenses and costs incurred, spent, or suffered from the party who committed the breach.
- To use this option, the suffering party must first give a written notice of at least thirty days to the breaching party, calling upon them to perform within that time.
- If the breaching party refuses or fails to perform within the notice period, the suffering party can proceed with the substituted performance.
- Costs and expenses can only be recovered if the suffering party has actually got the contract performed through a third party or by their own agency.
- Once substituted performance is obtained, the suffering party cannot claim specific performance, but they can still claim compensation for the breach.
Practical examples
FAQ
1. Can I immediately hire someone else to finish a contract and charge the breaching party?
No, you must first give the breaching party a written notice of at least thirty days to perform their promise. You can only hire someone else if they fail or refuse to perform within that notice period.
2. Can I recover costs if I just planned to hire someone else but have not actually had the work done yet?
No, you can only recover expenses and costs after you have actually got the contract performed through a third party or by your own agency.
3. Can I still sue the breaching party to force them to perform the contract after I have got it done by someone else?
No, once you obtain substituted performance, you are barred from seeking specific performance. However, you can still claim additional compensation for the breach of contract.
Test yourself
1.Under Section 20 of The Specific Relief Act, 1963, what is the minimum duration of written notice that the suffering party must give to the breaching party before undertaking substituted performance?
2.Under Section 20 of The Specific Relief Act, 1963, if a suffering party has successfully got the contract performed by a third party, what is the impact on their right to claim specific performance against the original party?
3.Under Section 20 of The Specific Relief Act, 1963, what is required before the suffering party can legally recover the expenses and costs of substituted performance from the breaching party?
4.Under Section 20 of The Specific Relief Act, 1963, does obtaining substituted performance prevent the suffering party from claiming compensation from the party in breach?