A contracts with B to construct a cold storage facility for 50 lakh within 6 months. After the expiry of the time period, B fails to perform the contract. A immediately hires C to complete the construction at 60 lakh and later files a suit against B claiming 10 lakh as the additional cost incurred. Which of the following statements is correct under the Specific Relief Act, 1963?

Question

For Specific Performance of a contract suit is to be instituted in

Answer 1

Step 1: Identify the breach. A and B agreed on a price of \( 50 \) lakh for B to construct the cold storage within six months. B did not complete the work in that period, which is a breach of the contract by B.

Step 2: Identify the substituted arrangement and its cost. After the breach, A engaged C to finish the same construction, and C's price was \( 60 \) lakh. This is the cost A actually had to pay to get the contract's object fulfilled once B defaulted.

Step 3: Compute the extra amount A is out of pocket. \[ \text{Extra cost} = 60 \text{ lakh} - 50 \text{ lakh} = 10 \text{ lakh} \] This \( 10 \) lakh difference exists only because B failed to perform; had B completed the work as agreed, A would never have needed to pay this extra amount.

Step 4: Apply the remedy of substituted performance. The Specific Relief Act, as amended, lets a promisee who has been met with a breach get the work substituted through a third party and then recover the extra expenditure from the defaulting party, without first needing a separate declaration of breach or being restricted to a bare damages claim. Applying this to the figures above: \[ \boxed{A \text{ can recover } 10 \text{ lakh from } B} \]

Answer 2

Another way to work through this fact pattern is to classify what kind of remedy A is actually pursuing, and then check each option against that classification.

Classifying A's claim: A is not asking the court to force B to build the cold storage, nor is A asking only for ordinary compensation calculated by a court's separate assessment of loss; A has already arranged for the work to be completed through C and is now claiming back the specific extra amount that arrangement cost, namely the gap between B's price and C's price.
Testing "court must first declare B guilty of breach": This treats A's claim as though it were a two-stage process requiring a separate finding of guilt before the cost claim can even be considered. In reality, the breach is simply one of the facts the court decides while adjudicating the recovery claim itself, not a separate prior proceeding A must complete.
Testing "must sue only for damages and not substituted performance": This mischaracterises A's claim as an ordinary damages suit, when in substance A is claiming the specific extra cost of substitution, a remedy the amended Act separately recognises and permits.
Testing "cannot recover because of no prior notice": This introduces a procedural defect, want of notice, that has no basis in the facts given; the facts describe only a breach followed by an immediate substitute arrangement, with nothing suggesting any notice requirement was left unmet.
Testing "A can recover 10 lakh because B breached the contract": Once A's claim is correctly classified as a substituted-performance claim rather than a damages claim or a claim needing a prior guilt declaration, the remedy simply requires identifying the breach and the resulting extra cost, which here is \( 10 \) lakh, being the difference between the \( 60 \) lakh paid to C and the \( 50 \) lakh originally agreed with B.

Correctly classifying A's claim as one for the cost of substituted performance, rather than damages or a pre-condition-laden remedy, confirms that A can recover 10 lakh because B breached the contract.

Answer 3

Another way to work through this fact pattern is to classify what kind of remedy A is actually pursuing, and then check each option against that classification.

Classifying A's claim: A is not asking the court to force B to build the cold storage, nor is A asking only for ordinary compensation calculated by a court's separate assessment of loss; A has already arranged for the work to be completed through C and is now claiming back the specific extra amount that arrangement cost, namely the gap between B's price and C's price.
Testing "court must first declare B guilty of breach": This treats A's claim as though it were a two-stage process requiring a separate finding of guilt before the cost claim can even be considered. In reality, the breach is simply one of the facts the court decides while adjudicating the recovery claim itself, not a separate prior proceeding A must complete.
Testing "must sue only for damages and not substituted performance": This mischaracterises A's claim as an ordinary damages suit, when in substance A is claiming the specific extra cost of substitution, a remedy the amended Act separately recognises and permits.
Testing "cannot recover because of no prior notice": This introduces a procedural defect, want of notice, that has no basis in the facts given; the facts describe only a breach followed by an immediate substitute arrangement, with nothing suggesting any notice requirement was left unmet.
Testing "A can recover 10 lakh because B breached the contract": Once A's claim is correctly classified as a substituted-performance claim rather than a damages claim or a claim needing a prior guilt declaration, the remedy simply requires identifying the breach and the resulting extra cost, which here is \( 10 \) lakh, being the difference between the \( 60 \) lakh paid to C and the \( 50 \) lakh originally agreed with B.

Correctly classifying A's claim as one for the cost of substituted performance, rather than damages or a pre-condition-laden remedy, confirms that A can recover 10 lakh because B breached the contract.

Show Hint

The Correct Option is C

Approach Solution - 1

Approach Solution -2

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