EXPLAIN THE PRINCIPLE OF MUTUALITY IN SPECIFIC PERFORMANCE

Abstract

The Mutuality Principle in Specific Performance, in order to guarantee justice and equity in the enforcement of contracts, the principle of mutuality in specific performance is a key idea in contract law.

The requirement that both parties to a contract be willing and able to fulfil their respective obligations is known as mutuality in specific performance. Stated differently, specific performance will only be allowed if both parties are able to fulfil their end of the bargain.

Bilateral contracts: When both parties have performance obligations under a bilateral contract, mutuality is applicable. Both parties must be bound by reciprocal obligations, which entail that the performance of one is reliant on that of the other. Ability to perform: Both parties need to be willing and able to fulfil their responsibilities.

No performance if there is insufficient mutuality: Specific performance will not be awarded if one party is incapable or unwilling to participate.

The performance of the defendant must be feasible: To be eligible for specific performance, the defendant must be able to perform.

The mutuality principle in specific performance, in short, guarantees that both parties to a contract are capable and willing to fulfill their respective responsibilities. Fairness, equity, and reciprocity are encouraged in contractual relationships by this principle.

In the context of specific performance, the principle of mutuality refers to a fundamental idea in contract law, where the mutuality of the agreement is a prerequisite for the court’s power to order a party to carry out its end of the bargain. To put it simply, mutuality in a contract means that both parties must be able to demand performance from each other. Both parties must be bound by reciprocal obligations for a contract to be enforceable through specific performance. The mutuality principle shields parties from being unjustly forced to fulfill obligations under a contract in which the other party does not have comparable responsibilities. By preserving the equity balance, it guarantees that each party has an equal right to anticipate that their promises will be kept. Specific performance is usually not given if either party can withdraw without facing any repercussions or if the terms are so ambiguous that mutuality cannot be proven.

Keywords

Mutuality in Principle of Specific Performance, specific performance of a contract, doctrine of mutuality.

Introduction

What is meant by specific performance of contract?

Enforcing the precise terms of a contract is known as specific performance. The plaintiff makes a claim under it for the item to which he is legally entitled under the terms of the contract. In the law of contracts, specific performance is an equitable remedy whereby a court orders a party to carry out a specific act, like finishing the contract. Injunctive relief pertaining to real estate or private information frequently takes the form of specific performance.

In the law of contracts, specific performance is an equitable remedy whereby a court orders a party to carry out a specific act, like finishing the performance of a contract. It is generally available in land law sales, but not in other situations where damages are a suitable substitute. Contracts of personal service almost never allow for specific performance, though the threat of contempt of court proceedings may guarantee performance. One of the more popular types of specific performance is an injunction, which is frequently related to real property or private information. The most efficient way to safeguard the innocent party’s expectation interest in a contract is through specific performance, which can take the form of any kind of forced action but is typically used to finish a previously established transaction. While it is typically the opposite of a prohibitory injunction, some mandatory injunctions have a similar effect to specific performance, and these distinctions are frequently illusory or difficult to apply in real-world situations.

What is Doctrine of Mutuality?

“The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the option of the other party.”

After a thorough examination of the underlying principles, the Ninth Report recommended that, in the absence of a specific provision to that effect, “there would still be scope for the application of the rule in Mir Sarwarjan’s case2 in the case of contracts for the purchase of property on behalf of a minor which cannot be said to be for the benefit of the minor.” This subsection was added to the report.

Only when one of the parties to a contract is unable to seek specific performance of the agreement while the other can is the doctrine of mutuality available for use; this circumstance is fully covered by section 12 of the Act. This criticism of the provision as an unnecessary superfluity appears to have some merit. We do not, however, believe that section 20(4) of the Act needs to be removed. It has not caused any issues and has been part of the statute for thirty years. It merely restates a widely accepted principle, as stated in the Ninth Report, that lack of mutuality should not be a basis for refusal of a specific performance order.

Mutuality in Specific Performance

There was still a mystery surrounding the topic of mutuality in particular performances. Most of the court’s decisions were sound, but neither the courts nor the authors of the texts were pleased with their attempts to articulate the guiding principles. The current formula, which evolved from two centuries of litigation and debate, required that the remedy be mutual and equally available to both parties. The plausibility of this formula was its worst flaw. Equality is equity, and a contract cannot be considered perfect unless both parties have equal access to remedies. The doctrine has persisted to this day because it is believable.

This doctrine’s central idea was that the circumstances that would have been presented in a particular hypothetical case that might have arisen should also be taken into consideration when deciding a cause, rather than just the circumstances that were brought before the court.
The defendant filed a lawsuit for specific performance after the now-complainant broke the terms of the agreement. It was believed that the doctrine had two parts: a positive and a negative. According to the former, the complainant should receive relief even though he had a sufficient legal remedy if the other party had been entitled to it in the fictitious opposite scenario. According to the negative doctrine, the complainant should not receive relief even though they are entitled to it in all other respects if, in the hypothetical opposite scenario, the other party could not or would not receive the remedy (even under the affirmative doctrine of mutuality). When presented this way, the doctrine appears incredibly scholarly, but this is only a rephrase in more accurate terms the dogmas that stern judges have developed a hundred times.
The affirmative and negative doctrines clearly differ greatly from one another. The affirmative action doctrine does not create hardship. If one agrees with Justice Story that, in accordance with the principles of natural justice, equity should grant specific performance of all contracts at the injured party’s election rather than leaving it up to the other party’s common law decision to perform or pay damages, then one must consider its operation to be beneficial.3. Without going into the depth of Story’s argument, it can be claimed that the equity of equality is adequate because there isn’t any significant equity to oppose relief. However, the negative doctrine would cause ongoing hardship if it were applied brutally. That person who has a contract violation and no suitable legal recourse ought to be turned away from an equity court due to a “equity” that is just as weak as the equity of equality, which was established by the party who broke the contract, is unacceptable. This kind of application of the equality principle is flawed because it places too much emphasis on a fundamentally sound idea while failing to weigh the competing interests against it. Equity must always be on guard against this fallacy. But the rule kept getting lip service, and there are enough examples of cases where a careful application of the rule produced ridiculous outcomes to show how dangerous false doctrine can be. The mistakes of judicial reasoning are typically corrected by judicial instinct, though this is not always the case.

Newer Conception of Mutuality – Mutual Performance of Mutual Obligations

The identity of remedy or negative doctrine of equality is still in use.
The mutuality principle still holds true. The false doctrine of equality was distinguished from this principle by both Ames and Lewis, but they disagreed on the specifics of the principle and did not fully analyze it. Expanding on the work of those scholars, this paper aims to elaborate on the truth they disclosed.

As currently understood, the mutuality principle deals with the mutual performance of obligations and is solely focused on ensuring that both the plaintiff and the defendant perform. Therefore, it only gets involved when a court is asked to uphold a bilateral agreement that the plaintiff hasn’t fully fulfilled. It makes no mention of remedy equality. It has nothing to do with any hypothetical case that might have come up if the defendant had sued after the now plaintiff had breached the contract. It is solely focused on the current situation before the court.
One way to summarize what it says about that circumstance is that the contract must be viewed as a whole, and the plaintiff’s obligations considered as well as those of the defendant; if it is feasible, both parties should fulfill their responsibilities simultaneously; if this is not possible, the court should either enforce the contract on terms that will provide the defendant with some guarantee of future performance by the plaintiff or not enforce it at all, whichever is more fair given the circumstances of both parties.

The idea behind equitable maxims is not that equality equates to equity, but rather that the pursuit of equity necessitates the pursuit of equity and that equity enjoys doing justice, not in two parts. Because they all stem from the same basic ideas of equity, the doctrine of mutuality is therefore the brother of the doctrines of hardship and completeness.

This principle has been worked out by the common law in terms of implied conditions, a characteristic fiction, and the number of damages. Although the outcomes are not totally satisfactory, overall, note the situation’s equity as far as as permitted by common law procedure’s limitations. It will be adequate to state these findings as follows for the purposes of this discussion. The law now tends to treat mutual promises as interdependent, meaning that both sides of the contract must be considered, whereas previously it treated them as independent, to be enforced regardless of the performance or non-performance of the other, unless specifically conditioned on one another. Naturally, common law is unable to directly enforce a contract other than through damages, which can only be awarded in the event of a breach and cannot occur on both sides other than in the case of a breach of merely subsidiary promises, making a complete breach on both sides impossible. Common law also cannot issue a conditional judgment requiring the defendant to reimburse damages in the event that the plaintiff fulfills their obligations. However, it can—and frequently does—state that the defendant’s promise is conditional or qualified rather than absolute, to perform at all times, so that the plaintiff’s failure to perform, repudiation, or even future incapacity to perform could release the defendant from performance and serve as a full defense against the plaintiff’s action. Therefore, the law, absent a provision for credit, makes payment of the price a condition concurrent with the seller’s obligation to deliver in the well-known scenario of a contract to sell goods. The buyer suing for non-delivery must allege and unless the tender has been waived, demonstrate your preparedness and willingness to pay. Even though credit is specified, the seller is released from his obligation in the event of insolvency, which results in a potential inability to pay. Furthermore, if the plaintiff’s promise has not been fully fulfilled, the damages will typically be decreased by deducting the value of the promise, even in cases where the defendant is unable to raise a defense, the default is his rather than the plaintiff’s, or the plaintiff’s default is too minor to qualify as an equitable defense.

Affirmative and Negative Aspects of Mutuality

The mutuality of performance doctrine has both positive and negative aspects, much like the exploded doctrine of equality or identity of remedy. If the defendant is forced to specifically fulfill his promises, the court must ensure that he obtains, or has a reasonable assurance of obtaining, the agreed-upon equivalent performance of the plaintiff’s promises. This is the affirmative aspect of mutuality. On the down side, the mutuality doctrine states that the defendant should not be forced to perform at all if the plaintiff cannot reasonably be expected to perform.

The denial of equitable relief is the result of the negative doctrine of mutuality, which is always harsh in situations where the plaintiff, ex hypothesis, lacks sufficient. Consequently, a remedy at law results in a significant denial of justice. This is comparable to the equality of remedy negative doctrine. However, there is a crucial distinction between the two doctrines: in some situations, the equity of mutuality may be so strong that denying relief is the lesser of two evils, while the equity of equality is too weak to support this denial of justice. There have been challenges to the last point. With considerable Vigor, Mr. Lewis attacked it, arguing that the record of cases in which the defendant had prevailed on this defense was one of “gross miscarriages of justice. “This paper will attempt to address his points, but for the time being, it must be sufficient to agree with this broad denunciation of the doctrine. Although the doctrine is unforgiving, there are instances where it is appropriate to apply it. However, Mr. Lewis was more than half correct because miscarriages of justice occur in far too many of the cases in which the defense has prevailed. The decisions’ application of the doctrine of mutuality takes on too much of the characteristics of a sanctuary for breachers of contracts. These are the main sources of error. The first is that, up until recently, most cases were based on the antiquated theory of equality of remedy, failing to even come close to a sound analysis of the issue. Then there has been a regrettable propensity to develop a strict and mechanical doctrine of mutuality that, in the name of justice for the delinquent defendant, far too frequently causes egregious injustice to the innocent plaintiff, even among those who have recognized the vice in the equality dogma. Finally, the doctrine’s negative aspects have been overemphasized while its affirmative aspects have been neglected. As a result, courts have frequently ignored the ways in which they can protect defendants while still requiring them to perform.

Affirmative Doctrine- Relief on Terms

The mutuality problem should be restated. By proving a legitimate contract, the defendant’s breach or threatened breach, and the insufficiency of the legal remedy, the complainant has established a prima facie case; however, he has not fulfilled his end of the bargain. This does not imply that the plaintiff is guilty of condition non-performance or breach. When the plaintiff makes promises in the contract that haven’t been fulfilled before the hearing, even though the defendant is in default and his performance is due first, the doctrine of mutuality enters the picture. It is obvious equity that the mutual promises should be performed in each of these situations.

The defendant has two options for claiming this equity. He can establish lack of mutuality as an absolute defense, or he can acknowledge the plaintiff’s right to relief and only assert his own equity to the plaintiff’s performance. Despite the stark differences between these stances, it is not immediately important which one the defendant adopts. Despite his claim of lack of mutuality, the court must first decide whether a decree that would guarantee mutuality and still require the defendant to perform can’t be crafted. Lack of mutuality would be proven in every instance of a bilateral contract executory on both sides if this were not done. Therefore, the question of mutuality is always first and foremost a question about the doctrine’s affirmative aspect.
And as previously stated, this is just a matter of methods. What tools does the court have at its disposal to protect the defendant’s assets, and how should it apply them?
The devices, which have been jokingly dubbed “cy pres performance,” are the conditional decree and performance with a variation. Once more, a master may impose conditional action with the decree. For example, the vendor may be ordered to deliver a deed to the master, who will then deliver it to the buyer after the buyer pays the price to the master. Alternatively, the decree may reserve the right to request the decree’s dissolution in the event that the plaintiff fails to fulfill his duties while giving the defendant an unqualified order to carry out a continuing obligation. commitments. Depending on the specifics of each case, considerations of expediency should guide the decision between these various types of decrees. Two T Which of them is used is not very important for the purposes of this paper.

Case Laws

Ardeshir H. Mama vs. Flora Sassoon (1928)^{^[1]}:

The plaintiff must demonstrate “readiness and willingness” to fulfill their end of the bargain during the transaction, according to the Privy Council, for specific performance to be awarded. This idea is essential for helping in an equitable manner.

K. Narendra vs. Riviera Apartments Pvt. Ltd. (1999):^{^[2]}

When the Supreme Court ruled in Favor of specific performance, it emphasized the special nature of immovable property. In this case, it was determined that monetary damages were not enough to remedy the violation.

Laxman Tatyaba Kankate vs. Taramati Harishchandra Dhatrak (2010):^{^[3]}

The Supreme Court rejected performance because it would cause the seller undue hardship. The court emphasized how crucial it is to consider justice and equity when granting a specific remedy.

Nathulal vs. Phoolchand (1970):^{^[4]}

The Supreme Court decided that particular performance could be granted since the buyer demonstrated that they were ready and willing to fulfill their end of the agreement, fulfilling a significant legal requirement.

Ramkrishna Pillai vs. K. Narayana Pillai (1967):^{^[5]}

The Supreme Court emphasized the unfairness of the contract and disapproved of specific performance. Fairness is necessary to provide this remedy, the court reiterated.

Geeta Rani Paul vs. Dibyendu Kundu:^{^[6]}

The Honorable Supreme Court ruled that if the plaintiff can demonstrate his ownership of the property, it suffices when he files a lawsuit for dispossession. Once the title has been established, it is no longer necessary to prove other details, such as being sold off the property.

Conclusion

To guarantee justice and equity in the enforcement of contracts, the mutuality principle in specific performance is an essential idea in contract law. By requiring both parties to a contract to be able and willing to fulfill their respective responsibilities, it encourages bilateralism and reciprocity in contractual relationships.The satisfaction of the expectations established by a contract that the parties willingly make is one of the crucial components of civil rights. A contract is more than a single transaction. It frequently serves as a link in a series of contracts. Economic and social life can be severely disrupted by a single failure. The agreement needs to be upheld. Only by providing compensation to the harmed party or by expressly enforcing the terms of the contract can the law of contracts enforce a contract. Executing the contract is the most natural way to end it. The performance can be attempted (also called tender) or real. The contract is discharged when one party offers to fulfill his promise in line with the terms of the agreement and the other party declines. For the tender to be considered legitimate, it must be made to the promisee or his designated agent, be unconditional, and be made at the appropriate time, location, and manner. It must also be for the full obligation.

The parties to a lawsuit are granted a number of reliefs under the Specific Relief Act, 1963. Their enforcing regulations and various reliefs are centered on giving everyone adequate compensation. The primary goal of this law is to ensure that no one has to endure losses and damages, and those responsible for causing such a situation must be able to reimburse the person for any illegal benefits they may have received. This law prioritizes treating everyone rather than unfairly favoring one group over another.

References

J.B. Ames, Columbia Law Review, vol 3.
George W. Mc Quain, West Virginia University College of Law, Mutuality Doctrine.
21^st March 2024, specific performance.
Arthur D. Austin, mutuality of obligation.
The Specific Relief Act, 1963.
Indian Contract Act, 1872.
Code of Civil Procedure, 1908.
https://ssrana.in/ufaqs/specific-performance-contract/
https://repository.law.umich.edu/articles/994/
https://core.ac.uk/download/pdf/287297188.pdf
https://blog.ipleaders.in/introduction-to-the-specific-relief-act-1963/
https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=3338&context=law_lawreview
https://www.scconline.com/blog/post/2023/08/18/specific-performance-and-determinable-contracts-a-comprehensive-analysis/
https://www.cambridge.org/core/books/abs/commercial-remedies-resolving-controversies/specific-performance-and-change-of-mind/41746C92FAED42D2C80AA5BE67E95BBB

^[1] Ardeshir H. Mama vs Flora Sassoon on 21 May, 1928

^[2] K. Narendra vs Riviera Apartments (P) Ltd on 24 May 1999

Equivalent citations: AIR 1999 SUPREME COURT 2309, 1999 AIR SCW 2378, 1999 (5) ADSC 256, 1999 (5) SCC 77, 1999

^[3] Laxman Tatyaba Kankate & Anr vs Taramati Harishchandra Dhatrak on 8 July, 2010, AIR 2010 SUPREME COURT 3025, 2010 AIR SCW 4570, 2010 (5) AIR BOM R 436, 2010 (7) SCC 717, (2010) 81 ALL LR 760, (2010)

^[4] Nathulal vs Phoolchand on 16 October, 1969, AIR 546, 1970 SCR (2) 854, AIR 1970 SUPREME COURT 546, 1970 ALL. L. J. 742

^[5] S. Ramakrishna Pillai vs Tirunarayana Pillai And Nine Ors. on 25 February 1931, AIR 1932 MADRAS 198

^[6] Smt. Gitarani Paul vs Dibyendra Kundu Alias Dibyendra Kumar … on 6 December, 1990

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