Keeping contracts alive

Keeping contracts alive

Context

The Specific Relief (Amendment) Bill 2017

Objective: to ensure completion of infrastructure projects

What is the intended purpose of the bill?

• Project completion: The Bill intends to direct the courts away from the usual practice of closing a case after a grant of monetary damages to the injured party to the contract. Instead, it pushes courts to direct parties to complete the promised project
• The Bill is an improvement on the Specific Relief Act of 1963 under which payment of damages was the rule and specific performance of contracts an “exception”

Other amendments proposed

• Substituted performance: It proposes for the substituted performance of contracts. That is, when a contract is broken, the party who suffers would be entitled to get the contract performed by a third party or by his own agency to recover expenses and costs, including compensation from the party who failed to perform his part of the contract. This would be an alternative remedy at the option of the party who suffers the broken contract
• The Bill also proposes to enable courts to engage experts on specific issues and to secure their attendance
• A new Section 20A is proposed for infrastructure project contracts. This provides that the court shall not grant injunction in any suit, where it appears to it that granting injunction would cause hindrance or delay in the continuance or completion of the infrastructure project
• Nodal agency: The Department of Economic Affairs is the nodal agency for specifying various categories of projects and infrastructure sub-sectors, which is provided as Schedule to the Bill. The Department may amend the Schedule relating to any such category or sub-sectors.