Specific Performance (Best Overview: Legal Remedy and Examples)

Specific Performance (Best Overview Legal Remedy and Examples)

What is specific performance?

How can you prove this legal remedy in court?

When do you ask for it and what are some concrete examples?

We will look at the specific performance definition, look at what it is, examples (such as in contracts and real estate), how it is evaluated in contract law, the elements you need to prove in court and more.

Be sure to read this article in full as you will learn things that you didn’t know before on the topic.

Let’s get started!

What is specific performance

Specific performance is an extraordinary order from the court requiring a contractual party to perform a specific obligation or act in accordance with what he or she had agreed upon in the contract.

This type of remedy is useful when the actual performance of a party’s obligation is the most appropriate remedy and where the award of damages may not be effective.

For example:

For example, you purchased an extremely rare piece of jewelry and Suzy hired John to renovate her kitchen.

John does not have the experience to get the job done, does not do the work well and to make things worse, does not finish the job.

In this case, Suzy may be better off getting a monetary award from John so she can have another experienced person finish the job.

Seeking specific performance from John will not be appropriate and may result in greater harm to Suzy.
Author

Specific performance is an equitable remedy developed in common law to compensate a contractual party when the award of damages may be inadequate.

Just like any other equitable remedies, the court will have the discretion to award specific performance by assessing the overall facts of the case and the circumstances of the parties.

You can think of specific performance as a form of injunctive relief left at the discretion of the court

Compelling a party to execute an obligation, perform a specific act or do certain things is just like injunctions.

Just like an injunction, a person is required to do something or not do something, failure of which he or she may be in contempt of court.

Advantages

An important advantage with the specific performance remedy is that a party will be required to perform a specific obligation or fully execute what he or she had agreed in the contract failure of which they may be exposed to contempt orders.

If a person deliberately refuses to comply with the order of the court and obey the terms of a judgment, the court may consider the defendant to be in contempt of court and issue important fines or even send the party to jail.

Intentionally breaching a court order can lead to contempt orders

Another advantage in specific performance is that the plaintiff or the aggrieved party can benefit and enjoy the bargain initially negotiated in the contract.

In other words, the plaintiff will force the defendant to fully execute the terms of the contract.

The plaintiff will get what he or she bargained for

Disadvantages 

Although specific performance may be suitable in cases involving the transfer of personal property or real estate, it may come with disadvantages in other instances.

One major disadvantage is the litigious context in which the defendant is asked to perform an obligation.

Remember that specific performance is ordered by the court, which means in the context of a contractual dispute between the parties.

Specific performance may not be suitable for personal service

If the specific performance requires that the defendant render services or perform certain things, it may not be done in accordance with the expected standards

Also, the court may not have the expertise or ability to supervise the performance of the work and ensure the defendant complied with the judgment.

Typically, if you are dealing with property, object or goods, it may be easier to enforce the specific performance.

Otherwise, it may be challenging.

Specific performance definition

According to Cornell Law School’s Legal Information Institute, specific performance is defined as:

For example, you purchased an extremely rare piece of jewelry and Suzy hired John to renovate her kitchen.

John does not have the experience to get the job done, does not do the work well and to make things worse, does not finish the job.

In this case, Suzy may be better off getting a monetary award from John so she can have another experienced person finish the job.

Seeking specific performance from John will not be appropriate and may result in greater harm to Suzy.
Author

What is notable with this definition is that the court will “order” a party to perform what it has “promised” as the award of monetary damages will not be suitable to compensate for the harm.

Specific performance allows the plaintiff to get his or her contractual bargain 

Specific performance law

When exercising its equity powers, the courts may grant specific performance when it represents a suitable remedy.

Typically, specific performance can be suitable in cases involving property or real estate property. 

Let’s look at the suitability of the specific performance equitable remedy in different areas of law.

Real estate transactions

Specific performance is a contractual remedy that is very common in real estate.

This is particularly the case as there may not be other remedies to compensate for the harm suffered by the failure of a party to transfer the title to a piece of land or real estate property.

Sale of property

You may also see the remedy of specific performance considered in cases where you have the purchase or sale of rare goods, work of art, collectible items, items with sentimental value and so on.

The failure to deliver a rare artwork or a good attached to sentimental value may result in harm to the aggrieved party in such a way that an award of monetary damages may not be adequate.

Leveraging specific performance, a court may order the selling party to deliver the good in question representing the most appropriate remedy.

Uniform Commercial Code

In the United States, the Uniform Commercial Code (UCC) provides for the applicable rule when dealing with the purchase or sale of goods.

Article 2-716 of UCC titled “Buyer’s Right to Specific Performance or Replevin” provides that if the goods are identified by the parties in a contract and that the seller has failed to deliver them to the buyer, the buyer can have the court order the seller to deliver the goods upon payment.

This is the notion of replevin or a “claim and delivery” action.

Replevin is a term used to refer to a non-monetary legal action where a party demands the transfer or delivery of a property.

Under UCC, if the “goods are unique” or “in other proper circumstances”, the court may award specific performance to compel the seller in performing his or her contractual obligations.

Contract law 

In contract law in general, specific performance may not be the most adequate remedy to damages suffered as monetary damages may be a better compensation.

Most often, monetary awards are effective for contractual disputes.

The application of specific performance will be narrower when evaluating the appropriateness of remedy to damages.

Ordering someone to personally perform an obligation may not lead to the most suitable remedy. 

The nature of the contract is important to evaluate along with the circumstances of the case.

For example:

For example, you purchased an extremely rare piece of jewelry and Suzy hired John to renovate her kitchen.

John does not have the experience to get the job done, does not do the work well and to make things worse, does not finish the job.

In this case, Suzy may be better off getting a monetary award from John so she can have another experienced person finish the job.

Seeking specific performance from John will not be appropriate and may result in greater harm to Suzy.
Author

Specific performance clause

Contracting parties can include a “specific performance clause” in their contract to provide for this remedy for specific circumstances. 

The specific performance clause is an enforceable clause although the courts will evaluate the overall circumstances of the case to determine its suitability.

A plaintiff requiring specific performance must have performed his or her obligation towards the defendant.

Otherwise, the courts may not award specific performance when the plaintiff did not execute his or her obligations towards the defendant or has contributed to the damages in a significant way.

Specific performance elements

What are the elements to prove for the court to award specific performance as a remedy for the prejudice suffered?

For the courts to award remedies based on specific performance, you must demonstrate the following:

  • You have a legally binding contract with the breaching party (contract
  • You must show the breach of contract (breach of contract)
  • You must not have contributed to the damages and contracted in good faith (plaintiff’s conduct)
  • Monetary damages will not be adequate to compensate you for the harm (damages)
  • You are ready to perform your correlative obligations to have the defendant complete his or her contractual obligations (mutuality of the obligation)

Once you’ve demonstrated the above points, the court will evaluate the circumstances of the case and exercise discretion to award specific damages or not (court discretion).

Contract

To compel the defendant to do something, you must have a valid contract to start with.

The contract must be legally formed and where the parties received a fair consideration for the performance of the obligations.

For the courts to exercise their powers in equity to order the specific performance of certain obligations, the obligation must be clear, specific and based in a legally binding contract.

Courts grant specific performance as a remedy for the breach of clear, specific and legally binding obligations 

Otherwise, it would not make sense for the court to enforce ambiguous terms or obligations the parties did not intend to commit to in their contract.

Breach of contract

Once you’ve established that you have a valid and binding contract, the next step is to demonstrate that the defendant breached the terms of the contract.

Just like any other breach of contract claim, you must be able to prove that the defendant is responsible for the breach and such breach has caused you damages.

Plaintiff’s conduct

The court will pay close attention to the plaintiff’s conduct in determining whether specific performance should be awarded or not.

To succeed with this remedy, you must demonstrate to the court that you acted in good faith and you did not act in such a way to trick the defendant, make false representations or unduly take advantage of a more vulnerable defendant.

Based on the clean hands doctrine, the plaintiff must have acted fairly and in good faith

The actions and conduct of the plaintiff will certainly have an impact on the court’s assessment. 

If the plaintiff acted unfairly, unjustly, in bad faith or violated standards of fairness, the courts may refuse to grant specific performance as a remedy.

Damages

The next element to prove is that the monetary award of damages will not adequately compensate you.

For example, you purchased an extremely rare piece of jewelry and money cannot allow you to buy it from somewhere else.

You will demand specific performance to have the defendant deliver the specific jewelry that you purchased.
Author

When monetary damages cannot adequately remedy the harm, specific performance can be considered by the court.

In most cases, an award for damages can remedy the damages in an effective way.

There are instances when that’s not the case, particularly when dealing with unique property, real estate, rare objects, artwork or other specific goods.

Mutuality of obligations

Another factor the court will consider is the mutuality of the obligations.

If the defendant did not execute an obligation because the plaintiff did not execute his or her obligation, the court may not grant specific performance as a remedy.

The plaintiff must demonstrate that you have substantially performed your obligations towards the defendant or if there are any obligations to be performed in the future, their performance is certain.

If the court is satisfied that the plaintiff has performed his or her obligations, it will consider compelling the defendant to execute his or her obligations.

Specific performance defences

How can a defendant defend against a specific performance claim?

There are several possible defences a defendant may invoke to challenge or attack a specific performance claim, such as:

  1. The unenforceability of the contract on the basis of the statute of frauds
  2. Laches as a defence against an equitable remedy when the plaintiff did not assert his or her claim within a reasonable delay thereby causing further injury if specific performance is granted
  3. The doctrine of clean hands can be invoked to argue that the plaintiff acted in bad faith or in violation of the standards of fairness
  4. The plaintiff may have tricked the defendant by misrepresenting important elements in the contract rendering the obligation unenforceable 
  5. Plaintiff’s refusal to execute his or her obligations justifying the defendant’s specific performance 
  6. Undue hardship or unreasonable burden to execute the obligations required by the plaintiff 

Specific performance remedy 

Specific performance is a specific type of legal remedy intended to make an injured party whole again.

In the case of contractual disputes, sometimes the plaintiff will file a lawsuit against the defendant asking for damages so they can be put in the state before the contract was signed (as if the relationship between the plaintiff and defendant did not exist).

In other cases, when a specific performance remedy is requested, the plaintiff demands legal remedy allowing him or her to enjoy the full performance of the defendant’s obligations.

Specific performance is suitable when dealing with land, real estate, specific goods, custom-designed goods, products in short supply or other tangible goods

However, in other types of contracts, such as service contracts, consulting contracts, development contracts, distribution contracts or any other, in most cases, specific performance will not lead to adequate compensation of the non-breaching party and may even cause further harm. 

For example:

John was hired to provide software development services to Mary.

John did not develop the software in accordance with industry standards and appears to lack the expertise.


Specific performance will not lead to a good result for Mary as John may deliver a poor software application.
Author

Another example when specific performance may not be suitable:

If Mary offers to buy a condo unit in a newly built construction project where there are hundreds of available condo units available to be purchased.

If the defendant breaches the contract, it may be hard for Mary to demand specific performance when an award of damages (money) will allow her to buy a comparable condo.
Author

In this case, the courts may consider an award of monetary damages to be the most appropriate remedy to the injury suffered.

Specific performance example

Example 1: Real estate transaction (remedy to buyer)

Mary makes an offer to purchase Helen’s property and agrees to pay a high price due to its unique characteristics and great location.

Helen (seller) ultimately changes her mind and no longer agrees to deliver the property as it was agreed. 

Mary can file a lawsuit against Helen demanding specific performance requiring Helen to close the deal and transfer the title of the proper to her.

Example 2: Real estate transaction (remedy to seller)

The specific performance remedy is also available to a seller of a real estate property.

Using the same example as above, Mary makes an offer to purchase Helen’s property.

However, Mary (buyer) changes her mind and backs out of the deal.

Helen can file a lawsuit against Mary demanding specific performance which is to close the real estate transaction, pay the agreed price and get title to the property.

Other examples

Here are other examples when specific performance may be considered:

  • Sale of rare painting
  • Sale of collectibles such as jewelry, stamps, coins or other 
  • Sale of antiques
  • Sale of family heirloom 
  • Sale of unique one-of-a-kind object
  • Sale of objects having sentimental value
  • Sale of goods in short supply
  • Entertainment by a unique performer

Specific performance FAQ

Specific performance FAQ

What is specific performance in real estate?

Specific performance in real estate is when a contracting party breaches the terms of the real estate contract and the non-breaching party demands the conclusion of the transaction.

For example:

John offers $300,000 to buy Suzy’s house and Suzy agrees.

They sign a promise to purchase setting the closing date within 30 days.


Suzy backs out of the deal and does not show up to close the transaction and transfer the title to John.
Author

John may demand specific performance to compel Suzy to close the transaction by signing the documents necessary to transfer the title or deed.

What is an example of specific performance?

The most common example of an award of specific performance relates to real estate matters or property.

For example:

Company A agrees to sell rare equipment to Company B who was looking for this for the past several years.

After the purchase contract is signed, Company A refuses to deliver the equipment.


In this example, specific performance can be an adequate remedy to compensate for the harm suffered by Company B.


Monetary compensation will not satisfy Company B it was looking specifically to purchase that specific rare piece of equipment.
Author

What are the elements of specific performance?

The following elements are what you need to prove in court to get a specific performance remedy:

  1. Valid contract with the defendant
  2. Breach of contract by the defendant
  3. You did not contribute to the breach 
  4. You suffered damages
  5. The damages cannot be adequately remedied with monetary compensation
  6. You have performed your obligations towards the defendant or the performance is certain

What is meant by specific performance in contract law?

In contract law, specific performance means to have the other party perform the obligations they promised to you in the contract.

Essentially, you are asking the court to have the defendant ordered to do what they were supposed to do based on the terms of your agreement.

When will specific performance be granted?

Typically, specific performance will be granted in cases where monetary awards could not compensate the aggrieved party for the damages suffered.

As an example, that can be the case in the following instances:

  1. Someone did not deliver a rare artwork you purchased
  2. Someone is not delivering a rare collectible you paid for
  3. A person is not transferring the title to a special sports car
  4. A person is not transferring the title to a piece of land 
  5. The seller of a property is backing out from the deal 

There are many more examples that can be cited.

The common thread here is that you generally have a tangible or fungible property that is the object of the dispute.

What is specific performance under California law?

Let’s consider the California laws to see how specific performance is awarded in this jurisdiction.

Under California laws, the courts may award specific performance when the specific performance is appropriate and the plaintiff has substantially performed his or her obligation (or the future performance is assured).

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