Step 1: Understanding the Concept:
The question asks to identify a type of contract that is not specifically enforceable by a court. The grounds for refusal of specific performance are listed in Section 14 of the Specific Relief Act, 1963.
Step 2: Detailed Explanation:
Section 14 of the Specific Relief Act lists the contracts which cannot be specifically enforced. One of the key categories listed in Section 14(b) is: "a contract the performance of which involves the performance of a continuous duty which the court cannot supervise."
The rationale is that it would be impractical and burdensome for a court to constantly oversee the performance of a long-term or complex contract to ensure its terms are being followed. For example, a contract to run a restaurant or a contract for construction that requires day-to-day oversight.
Let's analyze the options:
- (A) This is a direct statement of the principle in Section 14(b) and represents a contract that cannot be specifically enforced.
- (B) and (C) If a contract, even one with a continuous duty, can be supervised by the court (which is rare), it does not automatically fall under this bar. The key is the inability to supervise.
- (D) This describes a situation where specific performance is \textit{granted}, not refused. The inadequacy of compensation is the primary reason for ordering specific performance.
Step 3: Final Answer:
A contract involving a continuous duty that the court cannot supervise is explicitly mentioned in the Specific Relief Act as a contract that cannot be specifically enforced. Therefore, option (A) is correct.