Specific Performance Law

A contract is an agreement between two or more individuals or entities that creates mutual legal obligations that are outlined in the contract. Contracts may come in different forms, including written and oral. However, some types of contracts must be in writing to be enforceable.

Contracts that have been formed can be breached. A breach of contract occurs when one of the parties does not fulfill their obligations under the contract. The three main examples of the ways a party can breach a contract include:

• Anticipatory breach;
• Minor breach;
• Material or fundamental breach.

Anticipatory breach is also called anticipatory repudiation. It occurs when the breaching party informs the non-breaching party that they will not be providing the performance that they promised under the contract. Once the non-breaching party has been notified, they may be able to sue for breach of contract.

A minor breach of contract occurs when one of the parties fails to perform a minor aspect of their required performance under the contract. When a minor breach occurs, it means that the entire contract was not violated, and it may still be substantially performed.

Issues may also arise if there is a technical error in the contract, for example:

• A wrong date;
• An incorrect price;
• A typographical error in the contract.

One of the more common types of breaches is a material, or fundamental, breach. This is a breach that is so substantial it effectively cancels the whole contract because it renders the performance of either of the parties impossible.

A contract may also be breached if:

• It is fraudulent;
• It was formed illegally;
• It was unconscionable;
• There was a mistake of fact in the terms of the contract.

The parties to a contract are permitted to include a clause unique to their agreement that specifies when the actions of a party can be considered a breach of the contract. Additionally, applicable state laws, as well as the type of contract formed, such as a sales contract, lease agreement, or government contract, may provide other ways in which the contract may be breached.

What Are the Remedies to a Breach of Contract?

If one or more of the parties to a contract do not perform according to the contract terms, a breach of the contract has occurred. There are several possible remedies for a breach of contract, depending on the circumstances, including:

• A remedy specified in the contract itself, such as liquidated damages;
• An award of money damages;
• Restitution;
• Rescission;
• Reformation;
• Specific performance.

What Is Specific Performance?

Under contract law, specific performance is an equitable remedy where a court orders one of the parties to perform a specific action in order to complete their required performance under the contract. An order for specific performance typically arises when the parties have contracted with one another, but one of them failed or refused to perform as agreed under the contract.

What Are the Elements of Specific Performance?

The specific performance elements that must exist in order for this remedy to be available include:

• A valid and binding contract;
• Definite and certain terms;
• Mutuality of obligation and remedy;
• Freedom from fraud and overreaching; and
• A lack of remedy at law.

What Would Trigger Specific Performance?

There are certain factors that may trigger specific performance as a remedy in a breach of contract case. For example, if the subject of a contract is unique, meaning that it is not solely a matter of money, or when the true amount of damages may be unclear.

If, for example, a contract is entered into for the sale of a unique piece of property, money damages may not remedy the purchaser’s issue.

When May a Court Order Specific Performance?

Specific performance is only available in cases where money damages would not be a sufficient remedy for the non-breaching party. Because of this, specific performance orders typically only occur related to unique items, such as:

• Real estate;
• Antiques;
• Heirlooms;
• Artwork.

Although each piece of real estate could be considered a unique item, land sale transactions are often compensated using monetary damages. Specific performance is rarely ordered to compensate for physical tasks. For example, common home renovations, as it would be too difficult for a court to oversee those tasks, and they can be easily compensated using money damages.

What Do I Need to Show to Get Specific Performance Ordered?

There are several elements the non-breaching party will need to show in order to obtain a specific performance order, including:

• A valid and enforceable contract must have been entered into;
  • If the contract is found to be invalid or unenforceable, then the non-breaching party will not recover anything;
• The non-breaching party must show a breach of the contract occurred by the other party;
  • Usually, the breach is the failure to perform;
  • It is important for the breaching party to ensure that they upheld their end of the contract;
• Specific performance requires an individual to show that monetary damages are inadequate to compensate them for their claim. The item or items at issue must be so unique that monetary compensation does not adequately address the harm that was caused by the failure to perform;
  • In other words, if an individual can purchase another similar item elsewhere, then specific performance is not likely the remedy;
• Enforcement of a specific performance order must be practical. Performing a service, such as painting a house, is not practical for the court to oversee, but ordering a legal title to be exchanged is practical; and
• The party who refused to perform has to have no legal defenses for their failure to do so.

Are There Any Defenses to Specific Performance?

Yes, there are defenses that may be available for a breaching party who does not want specific performance to be ordered. One of the more common defenses is showing that one or more of the elements listed above was not met by the party that is seeking specific performance.

In addition, there are affirmative defenses that may be available against specific performance, including:

• Statute of frauds: Certain types of contracts that fall under the statute of frauds are required to be in writing, have the signature of the party charged with the performance, and have sufficient content;
  • If the statute of frauds applies, the defendant may use any of those missing elements as an affirmative defense to specific performance;
• Unclean hands: If the defendant is able to show that the party seeking enforcement of the contract acted unethically in the formation of the contract or during performance under the contract, the court may not reward the plaintiff;
• Laches: If the party seeking specific performance unreasonably delayed in bringing their lawsuit, their claim may be defeated;
• Undue hardship or burden: If the defendant can show that specific performance would create an undue hardship or burden on them, then this defense may be successful; and
• Mistake or innocent misrepresentation: If the defendant made an unintentional error during the formation of the contract, it may be a defense to specific performance.

When Should I Consult a Lawyer?

If you are involved in a breach of contract case where specific performance may be involved, it is important to consult with a contract lawyer. Specific performance as a remedy may be difficult to request.

Your lawyer can review your case and determine whether specific performance may be an available remedy. Your attorney can file a claim on your behalf and represent you in court throughout the process.

If the other party to a contract is trying to get the court to order you to comply with a specific performance order, your lawyer can advise you whether any of the defenses discussed above can be used in your case.