Section 20 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 20 lets a party who suffers a breach of contract get the contract performed through a third party or by his own agency and recover the expenses and costs from the party in breach. It requires a written notice of not less than thirty days first, and it ends the right to specific performance once the substituted performance is done.
This article follows the consolidated text of the Act consulted (amendments shown up to Act 18 of 2018). Later amendments should be checked before you rely on any provision.
Where a contract is broken by non-performance of a promise, the injured party has the option of substituted performance through a third party or his own agency, and may recover the expenses and other costs actually incurred. He must first give a written notice of not less than thirty days calling on the other side to perform. Once he has got the work done this way, he cannot claim specific performance, but he can still claim compensation. Section 20 was substituted by the 2018 Act.
What the footnotes show
Section 20 is printed in square brackets under a sub-heading "Substituted performance of contracts, etc." The footnote to the sub-heading says it was substituted by section 9 of Act 18 of 2018 for "Discretion and powers of Court". The footnote to section 20 says it was "Subs. by s. 10, ibid., for section 20 (w.e.f. 1-10-2018)". The earlier section 20 is not printed in the text consulted, so nothing is said here about what it provided. The bracket runs on through sections 20A, 20B and 20C.
If a supplier or contractor has failed you and you are weighing whether to get the work done elsewhere, it is worth taking advice on the recovery of your costs before the notice goes out.
Section 20(1): the option
"Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach."
The elements are:
- Breach by non-performance of a promise: the contract is broken because a party did not perform a promise.
- Option, not duty: the injured party "shall have the option".
- Two routes: "through a third party or by his own agency".
- Recovery: "the expenses and other costs actually incurred, spent or suffered by him". The word "actually" ties recovery to real outlay.
- Subject to agreement: "except as otherwise agreed upon by the parties". The contract can change this.
- Contract Act preserved: "without prejudice to the generality" of the Indian Contract Act, 1872. For that Act's rules on compensation, see our post on compensation for breach under section 73 of the Indian Contract Act, 1872.
Section 20(2): the notice and its proviso
"No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency".
So there are four steps:
- Give a notice in writing.
- The notice must allow not less than thirty days.
- It must call upon the party in breach to perform within the time specified.
- Only on his refusal or failure may the injured party get it performed by a third party or his own agency.
For the practical drafting of a notice, see our post on legal notice format, requirements and drafting tips. The Act prints no form for this notice.
The proviso: "the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency." Recovery follows actual performance: no performance through a third party or his own agency, no recovery of those expenses and costs.
An invented example: Sunrise Builders agrees to supply and fit 40 windows by a fixed date and fails. Kavita, the owner, sends a written notice giving thirty-five days. Sunrise does nothing. Kavita hires another fitter and pays for the work. She can recover the expenses and costs actually spent from Sunrise. If she had only sent the notice and never got the work done, the proviso says she could not recover under sub-section (1).
Section 20(3): no specific performance afterwards
"Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach."
A drafting slip: the sub-section speaks of notice "under sub-section (1)", but the notice is required by sub-section (2). The notice meant is the written notice of not less than thirty days in sub-section (2). Quoted as printed, the rule is clear: once he has got it performed, he cannot go back and ask the court for specific performance. This fits with section 16(a), which bars specific performance in favour of a person who has obtained substituted performance under section 20, and with section 14(a), explained in our post on when specific performance cannot be granted.
Section 20(4): compensation remains open
"Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach." Substituted performance does not close the door on compensation. For compensation within a suit for specific performance, see section 21.
| Sub-section | Rule | Key words |
|---|---|---|
| 20(1) | Option of substituted performance and recovery of costs | Third party or own agency; expenses and costs actually incurred; subject to contrary agreement |
| 20(2) | Written notice first | Not less than thirty days; call on party to perform within specified time |
| 20(2) proviso | Recovery tied to performance | No recovery unless the work has actually been got done |
| 20(3) | After substituted performance | No relief of specific performance |
| 20(4) | Compensation | Not prevented |
Practical points
Check the contract first: "except as otherwise agreed upon by the parties" lets a contract provide differently. Send a written notice with a clear period of at least thirty days and say what must be done. Keep invoices, vouchers and quotes of the substitute performance, because recovery is of expenses "actually incurred, spent or suffered". Decide before you act whether you want the contract performed (specific performance) or the substituted route, since after substituted performance the first is gone. The Act prints no limitation period for recovery of these costs; check the law of limitation, and for the general rule see our Limitation Act article on specific performance and compensation for breach of contract.
Sections 20A to 20C, in the same bracket, are about infrastructure contracts; see section 20A.
Need help recovering the cost of substituted performance?
If you have already had the work redone, or are about to, the notice, the vouchers and the contract terms decide what can be recovered. You can ask us about a recovery suit and have the file looked at before the notice or the claim goes out.
Key takeaways
- Section 20 was substituted by Act 18 of 2018 with effect from 1 October 2018.
- The injured party has the option of substituted performance through a third party or his own agency.
- A written notice of not less than thirty days must be given first.
- Expenses and costs actually incurred can be recovered, but only if the work has been got done.
- After substituted performance, specific performance cannot be claimed.
- Compensation remains open under section 20(4).
Read next
- Section 21 of the Specific Relief Act, 1963: compensation in a suit for specific performance
- Section 20A of the Specific Relief Act, 1963: no injunction in infrastructure project contracts
- Section 16 of the Specific Relief Act, 1963: personal bars to relief, readiness and willingness
Disclaimer: Based on a consolidated text of the Specific Relief Act, 1963 showing amendments up to the Specific Relief (Amendment) Act, 2018 (in force from 1 October 2018), as consulted on 2 October 2026. Later amendments, notifications under the Act and the law of limitation should be checked. This article is general information, not legal advice; check the official text before acting.