Specific Relief Act (SRA)
Substituted Performance of a Contract: Section 20
The 2018 Amendment gave the aggrieved party a self-help remedy that does not need the court's permission in advance. Under the recast Section 20, if the other side breaks the contract, the aggrieved party may, after due notice, have the contract performed by a third party or by his own agency, and then recover the cost from the defaulter. It is a practical answer to delay, especially in commercial and construction contracts. But it comes with a price: once substituted performance is obtained, specific performance of the same contract is barred. This note explains the mechanism, the notice, and the consequences.
Figure: Section 20: the five steps of substituted performance, and its two consequences for specific performance and compensation
1. The Provision
Section 20(1) and (2) ▪ The right. Where a contract is broken, the party who suffers may get the contract performed by a third party or by his own agency, and recover the expenses and costs from the party in breach. ▪ The precondition: notice. This right can be exercised only after the aggrieved party has given written notice of not less than thirty days calling on the defaulter to perform within that time, and the defaulter has failed or refused. ▪ Recovery of cost. Once substituted performance is actually carried out, the aggrieved party may recover the expenses and other costs actually incurred, spent or suffered. |
2. The Steps in Order
How substituted performance works ▪ Breach. The party who was to perform breaks the contract by not performing his part. ▪ Thirty-day written notice. The aggrieved party serves written notice of at least thirty days requiring performance within that period. The parties may agree a longer period. ▪ Failure or refusal. The defaulter fails or refuses to perform within the notice period. ▪ Substituted performance. The aggrieved party has the contract performed by a third party or by his own agency. ▪ Recovery. He recovers the expenses and other costs actually incurred from the party in breach. |
3. The Two Consequences
What obtaining substituted performance does ▪ Specific performance is barred. A party who has obtained substituted performance cannot afterwards claim specific performance of the same contract. This is reflected in Section 14(a) and Section 16(a). ▪ Compensation survives. Obtaining substituted performance does not take away the right to claim compensation from the defaulter for any further loss beyond the recovered costs. |
4. Points to Note
Point | The rule |
|---|---|
Notice is mandatory | The thirty-day written notice is a condition precedent to recovering the cost of substituted performance |
Actual performance needed | Only where substituted performance is actually carried out can the aggrieved party recover its cost |
What is recoverable | The expenses and other costs actually incurred, spent or suffered in getting the work done |
Contracting out | The parties' own agreement governs; the remedy operates against the defaulting party who ignored the notice |
5. Substituted Performance, Damages and Mitigation
- Against damages. Damages compensate for loss after breach; substituted performance lets the aggrieved party actually secure the performance and then charge its cost to the defaulter.
- Against specific performance. Specific performance compels the defaulter to perform; substituted performance sidesteps him and has the work done elsewhere, so the two cannot both be pursued for the same contract.
- Against mitigation. It resembles mitigation, but it is a statutory right to have the work done and to recover the outlay, not merely a duty to reduce loss.
6. Frequently Asked Questions
Q. What is substituted performance?
A. Under Section 20, the right of an aggrieved party, after due notice, to have a broken contract performed by a third party or by his own agency, and to recover the cost from the party in breach.
Q. What notice must be given?
A. A written notice of not less than thirty days calling on the defaulter to perform within that time; the aggrieved party may act only if the defaulter then fails or refuses.
Q. Can a party claim specific performance after substituted performance?
A. No. Once substituted performance has been obtained, specific performance of the same contract is barred, as Sections 14(a) and 16(a) reflect.
Q. Can compensation still be claimed?
A. Yes. Obtaining substituted performance does not take away the right to compensation for any further loss beyond the recovered costs.
SEO METADATA URL slug: substituted-performance-section-20-specific-relief-act SEO title: Substituted Performance of a Contract: Section 20 of the Specific Relief Act Meta description: Section 20 of the Specific Relief Act 1963 after the 2018 Amendment: the right to have a broken contract performed by a third party or one's own agency after a thirty-day notice, recovery of costs, and the bar on specific performance. Keywords: Section 20 Specific Relief Act, substituted performance, thirty day notice, recover costs substituted performance, substituted performance vs specific performance |