Specific Relief Act (SRA)
Persons Who May Obtain Specific Performance: Section 15
A contract binds its parties, but the right to enforce it by specific performance is not always confined to them. Section 15 lists, in clauses (a) to (h), the persons who may obtain specific performance of a contract. It runs from the obvious (a party to the contract) to the technical (a reversioner in remainder, a company after amalgamation, a company adopting a pre-incorporation contract). This note takes each clause in turn, explains the restriction on assignment where personal skill is involved, and sets out how pre-incorporation contracts are enforced.
Figure: Section 15: the persons who may obtain specific performance, clauses (a) to (h)
1. The List: Section 15(a) to (h)
Who may sue ▪ (a) A party to the contract. ▪ (b) The representative in interest or the principal of a party. But where the personal skill or other personal quality of the party is a material ingredient of the contract, his representative or principal cannot obtain performance unless the party has already performed his part, or the contract expressly allows it. ▪ (c) A beneficiary under a marriage settlement or family compromise. Where the contract is a settlement on marriage, or a compromise of doubtful rights between family members, any person beneficially entitled under it. ▪ (d) A remainderman. Where the contract is made by a tenant for life in due exercise of a power. ▪ (e) A reversioner in possession. Where the agreement is a covenant entered into with his predecessor and it affects the land. ▪ (f) A reversioner in remainder. Where the agreement is such a covenant and he will sustain material injury by its breach. ▪ (g) A new limited liability partnership after amalgamation. Where an LLP that made the contract is afterwards amalgamated with another LLP. ▪ (h) A new company after amalgamation, and a company adopting a pre-incorporation contract. Where a company that made the contract is afterwards amalgamated; and where promoters make a contract before incorporation for the company's purposes, the company, if it has accepted the contract and communicated the acceptance to the other party. |
2. The Restriction on Assignment: Personal Skill
Clause (b) and personal contracts ▪ The general rule. A party's representative in interest or principal may obtain specific performance, because the benefit of a contract is ordinarily assignable. ▪ The exception. Where the personal skill or other personal quality of a party is a material ingredient of the contract, the representative or principal cannot enforce it, unless the party has already performed his part, or the contract expressly provides that the representative or principal may. ▪ Why. Where the identity and skill of the promisor were of the essence, the other side bargained for that person; it should not be forced to accept performance from, or in favour of, someone else. |
3. Pre-Incorporation Contracts and the Company
How a company enforces a promoter's contract ▪ The problem. A company does not exist before it is incorporated, so it cannot itself have made a contract that its promoters entered before incorporation. ▪ The solution in clause (h). Where the promoters make a contract for the purposes of the company before its incorporation, and the term is warranted by the terms of the incorporation, the company may obtain specific performance. ▪ The condition. The company must have accepted the contract and communicated that acceptance to the other party. Acceptance after incorporation, duly communicated, lets the company step into the contract. |
4. Section 15 and the Assignment of Contracts
i. Assignable benefits. The benefit of most contracts may be assigned, and clause (b) reflects this by allowing the representative in interest to sue.
ii. Non-assignable personal contracts. Contracts turning on personal skill or trust are the exception; the proviso to clause (b) protects the other party from an unwanted substitute.
iii. A closed list. Section 15 is an enumeration; a person who does not fall within one of its clauses cannot obtain specific performance, though he may have other remedies.
5. Frequently Asked Questions
Q. Who may obtain specific performance of a contract?
A. Any of the persons listed in Section 15(a) to (h): a party, his representative in interest or principal, certain beneficiaries, remaindermen and reversioners, and a new LLP or company after amalgamation, among others.
Q. Can the assignee of a contract sue for specific performance?
A. Generally yes, as the representative in interest under clause (b), unless the personal skill or quality of a party was a material ingredient, in which case the proviso bars it.
Q. Can a company enforce a contract made before it was incorporated?
A. Yes, under clause (h), if the promoters made it for the company's purposes and the company has accepted it and communicated the acceptance to the other party.
Q. Is the list in Section 15 exhaustive?
A. It is an enumeration of those who may obtain specific performance; a person outside its clauses cannot claim the remedy, though other remedies may be open to him.
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