Understanding The Doctrine Of Part Performance In Real Estate And Property Law
INTRODUCTION
A legal theory known as the doctrine of partial performance permits the enforcement of an oral contract for the transfer of property even if it is not in writing. This doctrine is founded on the idea that when two parties enter into a contract and one party permits the other to act in accordance with the contract, that person creates equity and is unable to later contest the agreement’s performance on the grounds that the legal requirements were not met.
With certain modifications, India borrowed the doctrine of partial performance from English law. In India, the contract must be in writing in order to be eligible for the part performance remedy.
The requirements that must be met in order for the Doctrine of Part Performance to be applied are outlined in the Transfer of Property Act, of 1882.
CONDITIONS FOR PART PERFORMANCE
Certain prerequisites must be met in order for the Doctrine of Part Performance to be applicable. The Transfer of Property Act, of 1882 states that the transferee must have acquired possession of the property, in whole or in part, or that the transferee who is already in possession must maintain possession in order to partially fulfill the terms of the agreement and must have taken some action to that end.
The act of partial performance must be carried out by the party asserting the existence of the contract and must directly relate to it.
It is crucial to remember that the theory of part performance only applies to oral agreements involving the sale or transfer of real estate and not to other kinds of oral agreements.
The theory of partial performance is not applicable to contracts for the provision of personal services, according to the courts. Furthermore, the theory of part performance can only be used to overcome a Statute of Frauds defense when an equitable remedy, such as particular performance, is demanded. Past performance is not permitted when monetary damages are the sought-after remedy.
EXAMPLES OF PART PERFORMANCE
Different forms of part performance exist. Taking possession of the alleged sold property, covering at least a portion of the purchase price, and making significant changes to the property are a few examples of actions that qualify as part performance.
The Transfer of Property Act, of 1882 states that the transferee must have acquired possession of the property, in whole or in part, or that the transferee who is already in possession must maintain possession in order to partially fulfill the terms of the agreement and must have taken some action to that end.
It is significant to highlight that neither possession without payment, nor even complete payment, suffices. The Doctrine of Part Performance cannot be used unless all three conditions are met, i.e., receiving payment, gaining possession, and doing an act in furtherance of the contract.
EXAMPLES OF NON-PART PERFORMANCE
Acts that fail to meet the requirements for Part Performance are referred to as Non-Part Performance. Even a complete payment is insufficient, as is possession without payment.
Moreover, the idea of partial performance does not apply to other oral agreements other than those involving the sale or transfer of land. The Part Performance doctrine is not applicable to contracts for the provision of personal services, according to the courts.
It is crucial to remember that the idea of Part Performance is difficult to apply in actuality. A party claiming the Part Performance exemption must show that the oral agreement they are trying to establish is “unequivocally referable” to their actions.
SIGNIFICANCE OF PART PERFORMANCE
The Doctrine of Part Performance is crucial because, in situations where parties enter into unwritten agreements without taking into account all the potential conditions that might emerge during their interactions, it can preempt the Statute of Frauds.
As recognized and used by the court’s equity powers, the notion of part performance is an exemption to the Statute of Frauds’ prohibitions.
The doctrine of partial performance is predicated on the notion that when two parties enter into an agreement and one party permits the other to act in furtherance of the agreement, that party creates equity and is ineligible to later object to the agreement’s performance on the grounds that all legal requirements were not met.
The doctrine of partial performance takes into account scenarios where the transferor declines to approve the initial sales agreement and instead signs a contract with a different party in response to a better offer, kicking the original transferee out of the estate.
Because it can be used to enforce the right to specific performance, a remedy that calls on the party in breach to carry out the contract as agreed, the doctrine of part performance is important in real estate cases. Other sorts of oral agreements are not covered by the theory of part performance, which only applies to oral agreements involving the sale or transfer of real estate.
