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Faculty of Sharai'ah and Law

Assignment of the transfer of property act 1882 THE DOCTRINE OF PART PERFORMANCE

Submitted to: Maj Attaullah khan Submitted by: MUHAMMAD KAMRAN PASHA

The Doctrine of Part Performance

This doctrine has been discussed in the Transfer of property act IV of 1882 section 53-A.

53A. Part performance

Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. Comment: Since the appellant's claims is founded on Section 53-A, it goes without saying that he admits by implication that he came into possession of the land lawfully under the agreement and continued to remain in possession till date of the suit. Thereby the plea of adverse possession is not available to the appellant. Muhammad Alam v. Mirza Abdul Gaffar PLD 1996 SUPREME COURT 910 The statute of frauds prevents courts from enforcing an oral contract to convey an interest in real property. Without written evidence, a contract does not satisfy the formal requirements set by legislatures under their statutes of frauds. However, despite this clear legislative mandate, courts have regularly recognized exceptions based on acts taken by one or both of the parties in performing under the otherwise unenforceable contract. Considerations of fairness lead courts to apply an equitable exception to the usual legal result mandated by the statute of frauds. This is the equitable doctrine of ''part performance,'' under

which a court, through its equity powers, may provide equitable remedies to a party, including specific performance of an oral contract. If properly established, the doctrine of part performance allows a court to recognize and enforce an oral contract despite its legal deficiencies. Provisions of section 53-A are applicable to cases where a person had contracted to transfer immoveable property or had executed an instrument of transfer which was not registered. PLD 2002 Supreme Court 702 Where vendee has committed default in performing his part of contract, he cannot continue to remain possession in the grab of protection of agreement to sell. 2002 CLC 433 The doctrine of part performance provides a way around the statutory bar to the enforcement of an oral contract. When it applies, a party can establish the existence of a contract despite the lack of any written evidence. In such a case, proof of the contract may be sufficient even though it is made entirely by parole evidence. Nonetheless, a party must still meet the burden of proving the existence of the contract by clear and convincing evidence. The enforcement of an oral contract always involves two evidentiary steps. First, a party must convince the court that the alleged acts of part performance of the contract are sufficient to excuse compliance with the writing requirement of the statute of frauds; in other words, the evidence presented must convince a court that the doctrine of part performance is satisfied. Second, the party must prove all the elements normally required for recognition of a contract between the parties. The evidence must show a meeting of the minds based on an offer and a sufficient acceptance, as well as the consideration necessary for a valid contract. There must also be no proof of mistake, misrepresentation, or illegality that would otherwise invalidate the contract. Notably, even in cases where the circumstances would justify the defense of failure to satisfy the statute of frauds, an oral contract is nevertheless enforceable if the party fails to assert the statute as a defense in an action for enforcement of the contract. A defense otherwise available under the statute of frauds is waived if it is not pleaded. Application of the doctrine of part performance either takes a case involving an oral

contract out of the statute of frauds (that is, it makes the case an exception to the statute) or takes the statute out of the case (that is, the statute is held to be inapplicable). One common justification for applying the doctrine of part performance is that it satisfies the same policy considerations as the statute of frauds itself. The original statute of frauds expressly aimed to prevent fraud and perjury. However, in cases where part performance has occurred, allowing the statute of frauds to invalidate the contract would make the statute into an instrument that causes fraud rather than one that prevents it. If the statute of frauds were strictly applied in such a case, one party to the contract would be able to escape its own performance after permitting the other party to partly perform in reliance on an oral contract. Courts have viewed attempts to block enforcement of oral contracts by asserting the statute of frauds as a fraud against the party who has acted in reasonable reliance on the existence of the parties' agreement. It is important to draw a distinction here, however. The mere existence of an oral contract does not give either party the right to demand specific performance of the contract. The statute of frauds is designed to prohibit enforcement in this situation. Thus, one party's mere breach of a promise, in the absence of acts by the other party in reliance on the contract, gives rise only to ordinary contractual remedies. The extraordinary equitable remedy of specific performance is not available. A different situation arises if, between the dates an oral agreement is made and the date of an enforcement action, a party acts in reliance on the contract and changes circumstances as a result. Developments that occur after the creation of the oral contract can give rise to new rights and equities growing out of the new positions of the parties when one party acts in reliance on the oral contract and the other party acquiesces. In applying the doctrine of part performance, the courts are responding to the equities in the particular case. In such a case, because of the parties' change of position, the courts cannot adequately return the parties to their prior situations. Reliefs through actions at law for damages or restitution, for example, are considered inadequate. Therefore, courts are willing to protect the equities arising out of the transaction by decreeing specific performance of the oral contract despite failure of the parties to satisfy the statute of frauds. Charges of unfairness relating to the statute of frauds stem largely from the nature of

the statute. As a statute that imposes certain formal requirements on transactions, its application has the potential for defeating parties' actual intentions. The trend in many areas of modern contract law is to focus more on the intention of the parties and to disregard formal requirements if they prevent fulfillment of the reasonable expectations of the parties. Courts have also tended to provide equitable remedies in order to avoid the substantial injury that can result when legal remedies are inadequate. Because the part performance doctrine operates as a judicially developed equitable exception to the strict operation of the statute of frauds, however, most modern courts are reluctant to extend the exception beyond those situations traditionally recognized by the courts. Notably, the ''doctrine of part performance'' is not an accurate name. The doctrine may apply even where no acts required under the contract are performed. Only one of the typically recognized acts of part performance--payment of the contract price--is generally expressly mentioned as a requirement under a contract. The two other most common acts that qualify under the doctrine of part performance--taking possession of the property and making improvements --may occur because of the existence of the contract, but they are not acts that are literally required for performance of the contract. Thus, a better descriptive title for the doctrine would be the ''doctrine of acts performed in reliance on an oral contract.'' Reliance can include both acts taken to perform obligations under the contract and acts undertaken in reliance on the oral agreement. However, courts have used the narrower, and technically inaccurate, term for so long that it is a handy nickname for the rule as long as the doctrine's broader applications are recognized. The burden of proof is on the party who is asserting the doctrine of part performance. The existence of the alleged acts of part performance is a question to be decided by the jury or another trier of fact, while the sufficiency of the acts of part performance is a determination left to the judge as a matter of law. But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53-A of the Act. The necessary conditions are 1) there must be a contract to transfer for consideration any immovable property; 2) the contract must be in writing, signed by the transferor, or by someone on his behalf;

3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained; 4) the transferee must in part performance of the contract take possession of the property, or of any part thereof; 5) the transferee must have done some act in furtherance of the contract; and 6) the transferee must have performed or be willing to perform his part of the contract. We are, therefore, of the opinion that if the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53-A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract has barred by limitation.

Case Law on the Doctrine of Part Performance: PLD 1962 Supreme Court 134 Abdul Razzak Hawaldar-Appellant Versus Muhammad Shafi-Respondent
Civil Appeal No. 18-D of 1961, Decided on 1st March 1962 In this case the applicability doctrine of Part performance is discussed as; it will be observed that this section is only applicable only to cases where a person contracts to transfer immoveable property or executes an instrument of transfer of property which is not registered. A charge admittedly does not transfer any interest and therefore this section cannot be invoked in respect of a charge. While section 53-A is of no help to the defendant is so far as he relies upon clause 11 as creating a charge it does come to its assistance if the agreement containing in this clause was one of the conditions of the lease granted to the defendant. A lease is a transfer of immoveable property and to a lease deed which requires registration section 53-A will be

applicable if its conditions are satisfied. According to section 53-A the transferor or any person claiming under him cannot claim any right in respect of the property of which possession has been taken by the transferee except a right reserves by the terms of the contract. In the present case the lease was created for a period of five years. It could not, in view of the provisions of section 107 of the transfer of property act be created by an unregistered document. However the lessee entered into possession and paid money to the lessor in accordance with the terms of the lease deed and therefore the protection of section 53-A became available to the lessee. This section prohibits the enforcement by the transferor or any other person claiming under him of ''any right in respect of the property of which the transferee has taken possession''. The effect of section 53-A is that the transferee can recover consideration only in accordance with the term os the contract and the transferee can in lieu of such consideration successfully defends his possession of the property transferred. This brings us to the question of notice for the protection of section 53-A is not available against a transferee for consideration without notice of the contract, and the case of the plaintiff has been that he is such transferee. The high court had, after a consideration of the whole evidence, come to the conclusion that the plaintiff had no notice of what is contained in clause II. Before us it has been contended by learned council for the appellant on the strength of some cases from pre-partition India, which are ultimately based on some English authorities that that possession of the defendant over the premises in dispute at the time of transfer in favor of the plaintiff was sufficient to put the plaintiff on enquiry and that if he willfully abstain from an inquiry which he ought to have made he should be deemed to have constructive notice of that he would have found had he made that enquiry.