Companies Act 2014 section 426

Specific performance of contracts to subscribe for debentures

Section 426 deals with the enforcement of contracts to subscribe for and pay for a company's debentures, confirming that a court order for specific performance is available as a remedy.

• Where a person contracts with a company to take up and pay for debentures, that contract can be enforced by a court order for specific performance.
• Specific performance means a court can compel the subscriber to actually complete the transaction, rather than simply awarding monetary damages.
• This provides companies with a stronger enforcement mechanism when a subscriber fails to honour their commitment to acquire debentures.
• The provision applies to debentures of any kind issued by the company.