gokulakrishnan (CEO) 19 October 2010

whether time is essence for contract

that in a suit for specific performance of contract, whether the time stipulated in the contract is essential to dispose the case in hand? A entered in to a sale agreement with B for purchase 4 house sites. before the end of period of time A paid another sale advance amount to B and extended the contract for another period. before completion of the said extended period A without paying any additional sale advance and extended the contract for another period. before completion of the second extended period A came with an endorsement for another period of extension without pay any additional sale advance. Now B refused to extend. A sues against B and alleging that B did not obey the terms of contract and violated the same and B must be directed to execute a sale deed interms of decree. B contending that the value of the property is day by day increasing one, A wantedly delay and protracting the contract and the allegation against B is baseless and seek for dismissal of suit. Whether B has a chance to succeed in his attempt or not?

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5 Replies

adv. rajeev ( rajoo ) (practicing advocate) 20 October 2010

increasing value of the property is no way concerned. When there is an agreement of sale and your have proved that certainly your case will be decreed.

Only on the contentions of the defendent suit wont be dismissed.

Kamran Khan Asif (Advocate) 20 October 2010

B .. has every legal right to refuse the extension of agreement period, as per the terms of the agreement.

If A filed the specific relief suit before the expiry of the agreement period, he committed technical breach of agreement. However, if A has filed the suit immediate after expiry of agreement period, after serving B with due legal notice, then he has every chance of succeeding. Otherwise, there is no legal hope.

Deepak Shenoy (CS & LLB Student) 21 October 2010

Section 55 of Indian Contract Act & related case laws says that contracts for dealings in land time is not considered to be of essence however there are exceptions to it : -

a) Where the parties have expressly agreed to treat time is of essence of the contract

b) Where delay operates an injury

c) Where the nature and necessity of the contract requires it to be so construed ( Eg. Where a party asks for extenstion of time for performance)

If not specifically provided in the contract to me time is of essence, in the above case purchaser of the land has bought time twice from the seller which falls under category (c) above i.e both the parties have consented that time is of essence of the contract, further in the above case you seller can prove that delay operates an injury ( legal injury i.e financial loss).

Deepak Shenoy (CS & LLB Student) 21 October 2010

In addition to above, where time is of essence of the contract and promisor did not perform his part of the contract within the given time; the contract becomes voidable at the option of the promisee. In the above case vendee has a right to refuse his part of performance. Further, vendee has a right to forfiet the earnest money if it expressly provided in the contract.

(Guest)

In addition to above all, the act of the parties taken into consideration. Moreover the relief of specific performance of contract is a discretionary remedy. Only if the plaintiff satisfied that during the course of period of contract he is read and willing. Other wise the plaintiff cannot get the relief for specific performance of contract.