Specific Performance

Definition

Specific performance is a legal remedy in contract law that requires a party to fulfill their obligations under a contract rather than simply paying damages for failing to do so. This remedy is typically used when monetary compensation is inadequate to address the harm caused by a breach of contract, often in cases involving unique goods or real estate. Specific performance underscores the importance of honoring contractual commitments and ensures that the injured party receives exactly what was promised.

5 Must Know Facts For Your Next Test

1. Specific performance is most commonly ordered in contracts involving unique items, like art or real estate, where substitutes cannot fulfill the same value.
2. This remedy is an equitable remedy, meaning it is granted at the discretion of the court and typically not available for all types of contracts.
3. Courts may deny specific performance if it would cause undue hardship on the party required to perform the contract.
4. The requesting party must demonstrate that they have fulfilled their contractual obligations or are ready to perform them.
5. Specific performance differs from expectation damages, which focus on monetary compensation for losses incurred due to a breach.

Review Questions

• How does specific performance differ from other remedies available for breach of contract?
  • Specific performance differs from other remedies like expectation damages because it requires the breaching party to actually fulfill their contractual obligations rather than just compensating the injured party with money. It's typically used in cases where the subject matter of the contract is unique, making monetary damages insufficient. This makes specific performance an equitable remedy that focuses on enforcing the terms of the contract itself rather than providing financial compensation.
• What circumstances might lead a court to deny an order for specific performance?
  • A court might deny specific performance if it determines that enforcing the contract would cause undue hardship to the party required to perform. Additionally, if the requesting party has not fulfilled their own obligations under the contract or if the contract lacks clarity and certainty, these factors can lead to a denial. Courts may also consider whether damages would adequately compensate for the breach before ordering specific performance.
• Evaluate how specific performance serves as a tool for promoting contractual compliance and what implications this has for parties entering into contracts.
  • Specific performance promotes contractual compliance by emphasizing that parties must adhere to their agreements, ensuring that each side can rely on the other's commitments. This creates stability and predictability in commercial transactions, as parties understand that breaching contracts can lead to mandatory enforcement rather than mere financial penalties. As such, knowing that specific performance can be sought encourages parties to negotiate clear terms and fulfill their obligations, fostering trust and accountability in contractual relationships.

Related terms

Breach of Contract: A breach of contract occurs when one party fails to perform their duties as outlined in the contract, leading to potential legal consequences.

Equitable Remedies: Equitable remedies are court-ordered actions that require parties to act or refrain from acting in a certain way, such as specific performance or injunctions.

Injunction: An injunction is a court order that compels a party to do or refrain from doing specific acts, often used in cases where monetary damages would not be sufficient.