CONTENTS-

No Topic Page
01 Part Performance 02
02 Introduction 02
03 What are the terms of the agreement? 03
04 Application 04
05 Part Performance in England 04
06 Examples of Acts Considered Part Performance 05
07 Examples of Acts Not Considered Part Performance 05
08 Doctrine of part performance 06
09 Essentials of the doctrine of part performance 07
10 Part Performance 08
11 English and Indian law 09
12 The Indian Law of Part Performance 09
13 Object of the doctrine of Part Performance is to prevent fraud. 10
14 constitute the transfer can be ascertained with reasonable 10
certainty, and the transferee

15 transfer has not been completed in the manner prescribed 10

therefor by the law for the time being in force

16 It has also been provided by the section 53A 11

17 Basis of the doctrine of part performance are the following 11
three maxims of equity

18 The doctrine of part performance requires following conditions 11

19 Difference between English and Indian doctrine of part 11
performance.

20 Conclusion: 12
21 References 13

pg. 1
Part Performance
According to the doctrine of part performance, a contract for sale of land which
fails to meet the requirement for written signed contracts (eg, an oral contract)
will raise an equitable title if it has beenpartly performed. When determining
whether part performance applies, the court examines (:McBride v Sandland)
[1]:

Whether the acts imply the existence of an agreement?

If so, what are the terms of the agreement?

In this inquiry, the following requirements must be satisfied (:McBride v

Sandland) [2]:

The acts relied on must unequivocally, and in their own nature, be referable to
(indicative of) some agreement of the general nature of that alleged.

This requires that the acts could only have been done for the purposes of
fulfilling the alleged agreement - there can be no other reason why they were
performed.

The party performing the acts must have been doing so in reliance on the
alleged agreement (ie under the assumption that the agreement exists), and the
other party must have permitted the acts to be done also because of the
agreement.

The acts must have been done by a party to the alleged agreement.

The alleged agreement must have been complete.

The acts must have been done in compliance with the terms of the oral
agreement.

If these requirements are satisfied, the court may rule that, since the agreement
has been partly performed, it is binding despite the failure to meet the
requirement that a contract for sale of land must be in writing. This will transfer
an equitable title to the purchaser.

Introduction

Despite the requirement for written signed contracts for the sale of land,
contracts that fail to meet the requirements may still bind the parties in equity
under the doctrine of part performance.

pg. 2
This means that if there is evidence that an oral agreement to sell or lease land
has been partly performed, it may be enforced by the courts.

A quick example of how the doctrine of part performance is applied is the case
of Mason v Clarke: [3]

Facts: An oral agreement to allow hunting rights and profit-aprendre a lessor

and an individual named Mason. The lessee (Clarke) tried to prevent Mason
from exercising these rights on the claim that there was no written agreement.

Held: Although there was no sufficient memorandum for the oral agreement, the
acts done by Mason (preparing and actually hunting rabbits) constituted acts of
part performance. He has thus acquired his relevant interest in the land, and can
take actions the lessee who tried to deprive him of them.

When Do Acts Constitute Part Performance?

[4] The proper course to determine whether acts of part performance are
sufficient to attract the equitable jurisdiction of the court is set out in McBride v
Sandland: [5]

Do the acts imply the existence of an agreement?

What are the terms of the agreement?

In this inquiry, the following requirements must be satisfied:

The acts relied on must unequivocally, and in their own nature, be referable to
(indicative of) some agreement of the general nature of that alleged.

This requires that the acts could only have been done for the purposes of
fulfilling the alleged agreement - there can be no other reason why they were
performed.

The partying performing the acts must have been doing so in reliance on the
alleged agreement (ie under the assumption that the agreement exists), and the
other party must have permitted the acts to be done also because of the
agreement.

The acts must have been done by a party to the alleged agreement.

The alleged agreement must have been complete.

pg. 3
The acts must have been done in compliance with the terms of the oral
agreement.

Application

The test set out above in McBride is a pretty narrow approach - Australian
courts are more reluctant in determining that acts constitute part performance.

A good demonstration of the strict approach, and when acts do constitute part
performance in Australia is ANZ v Widin:

'The acts of the bank, seen in this context, lead to the conclusion that they are
unequivocally and in their own nature referable to a contract of the general
nature of that alleged by the bank; namely, that there was an oral agreement
between the bank and the bankrupt that the bankrupt would grant a mortgage to
the bank over the Bellevue Hill property to secure to the bank its right of
indemnity. In rendering itself liable on the bills, the bank altered its position on
the faith of the oral agreement'. [6]Another example of the strict approach is
given in Ogilvie v Ryan:

Facts: Defendant claimed that she had orally agreed with testator that, in return
for her looking after him, she’d be able to live in the house for as long as she
wished.

Held: The Defendant's actions of changing house and providing unpaid care
were not unequivocally referable to a promise to give her an interest in land.
They were also consistent with a voluntary association maintained through love
and affection, perhaps with an element of greed.

Note: this is probably a gender biased decision.

Part Performance in England

Note: this part doesn't apply to Australia. You may choose to just move on to
the next section, Examples of Part Performance.

[7] In England, a more liberal approach is adopted when examining whether

acts constitute part performance. This can be seen in Kingswood Estate v
Anderson:[8]

Facts: a life tenancy was created pursuant to an oral agreement. The landlord
supplied the tenants a weekly tenant rent book, and eventually gave the tenant

pg. 4
notice to quit as if they had a weekly tenancy. The tenants claimed that they had
a life tenancy according to the oral agreement.

Held: the sole fact of going into possession amounted to part performance. Once
there is some evidence of part performance, it is enough to allow the admission
of parol evidence to prove the exact terms.[9] And also in Steadman v
Steadman: [10]

Facts: a divorcing couple reached an oral settlement (one of the clauses stating
the husband make a payment to the wife). When the agreement was drafted, the
wife refused to sign. The husband, who already made a payment, claimed part
performance; the wife countered that his acts could not be unequivocally
referable to an agreement of the kind alleged.

Held: the husband’s actions of payment to his wife and forwarding the transfer
deed amounted to part performance of the oral agreement.

However, in ANZ v Widin, it was stated by the court that these cases are not
followed in Australia.

Examples of Acts Considered Part Performance

There are some acts which are generally considered good examples of part
performance: [11]

Deposit/taking possession of title deeds - a lender would usually take the

borrower's title deeds for security.

Equity views this transaction as effective to create a mortgage. [12]

It sees the deposit as evidence of an agreement to create a mortgage. It is

considered to be part performance by both parties. [13]

Improvements to the property by the lessor at the request of the lessee. [14]

Payment of the purchase price and making improvements. [15]

Taking possession of land. [16]

Examples of Acts Not Considered Part Performance

There are some acts which are generally considered insufficient to constitute
part performance: [17]

pg. 5
For contracts for sale of land, mere payment of purchase money is insufficient.
[18]

The making of an application for a planning permission is insufficient. [19]

Doctrine of part performance (20)

The Doctrine of Past Performance, based on principle of equity, developed in

England and was subsequently added to the Transfer of Property Act, 1882 via
the Amendment Act of 1929. In law of contracts (for e.g., a contract for sale),
no rights pass to another till the sale is complete But if a person after entering
into a contract performs his part or does any act in furtherance of the contract,
he is entitled to reimbursement or performance in case the other party drags its
feet.

Section 53A says that if a person makes a agreement with another and lets the
other person act on the behalf of the contract; such a person creates an equity
himself that can not be resisted on the mere grounds of absence of formality in
the evidence or contract of such a transfer. Thus, if the contract has not been
registered or completed in the prescribed manner, the transferor can still not go
against the transferee or anyone claiming under him. However, the deed should
not be unsigned or unstamped. Nothing in this section affects the rights of a
transferee for consideration even if he had no notice of contract of part
performance.

Illustration: A contracts with B to sell his plot for X amount of money. A

accepts the advance from B towards the sale of the plot and hands over the
possession of the said plot to B. After some time, B is ready to pay the
remaining sale amount but A refuses to accept the same. Further A asks B to
hand over the plot back to him.

Here B is ready to perform his part of the contract but A is not. In such a case, B
can bring a case requiring specific performance from A. It does not matter that
the sale was not registered.

As per law, a transfer of immovable property valued over Rs. 100 has to be
registered. But it was believed that strict compliance may lead to extreme
hardships especially where one party has already performed his part in the
confidence that the other party will honor the agreement. If such registration or
other formalities have not taken place, the doctrine of part performance will be

pg. 6
applicable. If such a transferee takes possession of the property, he can not be
evicted due to an unregistered contract.

The section is a defense as well as a right that helps protect the possession
against any challenge. It tries to prevent fraud on the mere basis of ineffective
evidence of the transfer. The section does not confer a title upon the transferee
in possession but it imposes a statutory bar on the transferor.

Essentials of the doctrine of part performance (20A)

a) There must be a written contract for transfer of an immovable property signed

by or on behalf of the transferor. The doctrine can not be applied if there is a
void agreement or no agreement.

b) There must be consideration;

c) The contracts should give out the terms of the transfer with reasonable
certainty;

d) The transferee must have taken possession as a result of this contract or

continued in possession if he was already in possession of the property;

e) The transferee must have done some act in furtherance of the contract. Acts
done prior to the agreement or independent of it can not be deemed to be part
performance of the contract; and

f) The transferee should have performed his part of the deal or be willing to
perform it.

WALSH vs. LONGSDALE and MADDISON vs. ALDERSON are two of the
major cases that have helped develop the doctrine of part performance in
England. In India, this doctrine has been enacted with a few modifications.

MADDISON vs. ALDERSON 1888

B was A’s servant. A had promised B a certain property as life estate, meaning
B could enjoy the property during his life time. B served A for years upon this
promised life estate. The will bequeathing such interest and property to B failed
due to want for proper attestation. After A died, one of his heirs brought action
to recover the property from B.

pg. 7
It was held that the act of part performance could not be proof of the contract
since the performance was a condition precedent to the contract. The heir of A
was able to recover the said property.

WALSH vs. LONGSDALE 1882 21 Ch d 9

Walsh took a cotton mill on lease for 7 years from Longsdale, the owner of the
mill. The agreement was prepared but not signed. In the meantime, rent arrears
started to accumulate as Walsh could not keep up with the quarterly payments
of rent. An advance of one year’s rent could be demanded by Longsdale as per
the contract. Lonsdale demanded the advance rent for one year and seized some
goods of Walsh when he defaulted. Walsh sued for damages.

The House of Lords decided in favor of Lonsdale stating that by running the
mill, Walsh had admitted he was a lessee and evidence of his consent to the
unsigned lease deed.

The rule laid down in Walsh vs. Longsdale is not applicable in India – as it did
not constitute the doctrine of part performance.

Prior to the enactment of the Transfer of Property Act, 1882, the English law of
Part Performance was applied. Before Section 53A was inserted in the Transfer
of Property Act, 1882, there were different views upon such application. After
the Transfer of Property Act, 1882 came into force; some thought that Sections
54 and 59 which required registered documents were necessary for sale of
immovable property or regarding mortgage respectively. While others argued
that requiring strict compliance would be detrimental to the rights of the
impoverished masses of India who could be duped by scrupulous individuals
taking advantage of the law.

The Privy Council in MOHD MUSA vs. AGHOR KUMAR GANGULI AIR
1914 PC 27 (30) held that doctrine of part performance is applicable in India.
There were divergent views a few years later stating that doctrine can not be
used to override statutory provisions. Finally in 1929, the Transfer of Property
Act was amended and the English law of part performance became a part of
Indian Laws though a little modified. Equity on that as done as which ought to
have been done: Section 53A of the Transfer of Property Act, 1882

Part Performance – Where any person contracts to transfer for consideration

any immoveable property by writing signed by him or on his behalf from which
the terms necessary to constitute the transfer can be ascertained with reasonable
pg. 8
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 where
there is an instrument of transfer, that the transfer has not been completed in the
manner prescribed therefore 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.

The proviso is an exception of sorts stating that the interests and rights of a
subsequent transferee for consideration will be protected as long as he had no
notice of the contract leading to the part performance due or the part
performance thereof.

In India, the doctrine is used only as a shield and not to enforce rights as laid
down by the Supreme Court in Delhi Motors case. But it must be noted that the
aggrieved party can either be the plaintiff or the defendant in a suit as the case
maybe.

English and Indian law

The English Law of Part Performance:-

1) The contract need not be written or signed by the transferor

2 The right under the doctrine is an equitable right

3) It can be used for enforcing the right as well as defending the right; and

4) It creates a title in the transferee.

The Indian Law of Part Performance

1) Section 53A deals with the Doctrine and state that the contract has to be
written as well as signed by the transferor

2) It is a statutory right;

3) It can only be used to defend the possession of the transferee; and

pg. 9
4) It does not create a title in the transferee.

After 2001 amendment to Section 53A, the application of the section has seen
dilution – it no longer serves as a ‘substitute’ for registration. It should still hold
good for defects other than registration. But, registration of sale of immovable
property is compulsory and Section 53A has been amended to incorporate the
same.

Object of the doctrine of Part Performance is to prevent fraud.

Section 53A of the Transfer of Property Act lays down that where any person
contracts to transfer ---

a) For consideration,

b) Any immovable property,

c) 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

a) Has, in part performance of the contract, taken possession of the property or

any part thereof, or

b) 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

c) The transferee has performed or willing to perform his part of the contract,

Then not withstanding that 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

a) 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

b) Of which the transferee has taken or continued in possession, other than a

right expressly provided by the terms of the contract.

pg. 10
It has also been provided by the section 53A, as an exception to this rule,
that nothing in this section shall affect the rights of a transferee for
consideration

i) Who has no notice of the contract or

ii) Of the part performance thereof.

Basis of the doctrine of part performance are the following three maxims of
equity

i) He who seeks equity must do equity.

ii) Equity treats that as done which ought to have been done.

iii) Equity looks to the intent rather than to the form.

The doctrine of part performance requires the following conditions to come

into play

1) There should be a contract, to transfer any immovable property , for

consideration ,duly written and signed by the transferor or on his behalf , from
which the terms necessary to constitute the transfer can be ascertained with
reasonable certainty .

2) The transferee must have taken possession of the property or any part thereof
or if already in possession should have continued in possession in part
performance of the contract and should have done some act in furtherance of the
contract.

3) The transferee must have performed or is ready and willing to perform his
part of the contract.

4) The rights of any other subsequent transferee for value without notice will
not be affected by this doctrine.

There is difference in between the English and Indian doctrine of part

performance.

i) According to the English law even oral agreement comes within the purview
of this doctrine on the strength of equity but it is not so in India.

pg. 11
ii) According to the English law both the plaintiff and defendant can avail of
the doctrine whereas it is not so in India. In india this doctrine is used as a shield
and not as a sword.

Conclusion:

We conclude that, although historically the cases on part performance fall into
two groups, fraud and possession, the reasons behind the possession group are
purely historical, and that consequently those cases should have no influence as
precedents upon modern cases. [21]

The phrase "part performance" is a misnomer. Cases should not be taken out of
the statute because of certain types of acts of part performance, but solely to
prevent fraud. In other words, the golden thread running through the cases on
part performance and the Statute of Frauds is the prevention of fraud. American

Courts are showing a marked tendency to rest the doctrine upon equitable fraud,
insisting, however, that the acts in question be referable to a contract, in order to
prevent the very evil which the statute was passed to prevent. There should not
be a case of equitable fraud unless the plaintiff will be placed in a position

where he will suffer irreparable injury if specific performance is refused. This

result is in accord with general equitable principles and does not thwart the
policy of the statute.

pg. 12
References:

Property Textbook refers to Edgeworth et all, Sackville and Neave's Property

Law Cases and Materials, 8th edition, Lexis Nexis, 2008.
Equity Textbook refers to Evans, Equity and Trusts, 3rd edition, Lexis Nexis,
2012.
1. (1918) 25 CLR 69.
2. (1918) 25 CLR 69.
3. (1955) AC 778
4. Property Textbook, pp. 313-4 [4.39].
5. (1918) 25 CLR 69.
6. [1990] FCA 474 at [77].
7. Property Textbook, pp. 314-5 [4.40].
8. [1963] 2 QB 169.
9. Property Textbook, p. 315 [4.41].
10. [1976] AC 536.
11. Property Textbook, pp. 317-8 [4.44].
12. Russel v Russel (1783) 1 Bro CC 269.
13. Theodore v Mistford (2005) 219 ALR 296.
14. Rawlinson v Ames [1925] Ch 96.
15. Pejovic v Malinic (1959) 60 SR (NSW) 184
16. Regent v Millett (1976) 133 CLR 689.
17. Property Textbook, p. 318 [4.44].
18. Britain v Rossiter (1879) 11 QBD 123.
19. New Hart Builders v Brindley [1975] Ch 342.
20. http://definitions.uslegal.com/p/part-performance-doctrine
20A. https://kanwarn.wordpress.com/2011/02/24/transfer-of-property-act-1882-
part-performance
21.http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=8378&context=
penn_law_review

pg. 13