breach of contract

Breach of Contract: Specific Performance

Obtaining Specific Performance in a Breach of Contract

Specific performance is a legal remedy that binds the parties of a contract to the terms of the contract. Specific performance asserts that parties to a contract are to perform the exact terms of the contract as they promised to do when then contract was signed. When the breaching party is found guilty of a material breach, the wronged party can pursue specific performance as a remedy to the breach. Other remedies include collecting damages in the value of money determined by the court, or a settlement. The specific performance remedy requires taking an objective approach on the language of the contract. Since the remedy is requiring the breaching party to perform the specific terms of the contract, it is important to know exactly what those specific terms imply. Once specific performance is identified as the appropriate remedy, the wronged party will ask the court to issue a mandate that requires the breaching party to comply with the terms of the contract.

When To Ask For Specific Performance

When deciding what type of remedy you want to pursue, it is important to think about it strategically. There are many financial factors to consider such as the value of the contract, potential outcome of the contract, current financial capital needs, and many others. It is also important to consider why the contract was not fulfilled in the first place. It is possible the breaching party was physically unable to perform the contract and seeking specific performance would be futile. Also, specific performance is an equitable remedy, which is often harder to receive. Equitable remedies are usually only available when a monetary remedy will not fully take care of the breach.

Criteria for Specific Performance

Once you decide you want a specific performance remedy, the court will require very specific criteria to grant it. In order to be granted a specific performance remedy by the court, the first thing you will need is a valid contract. The contract must be specific with clear and enforceable terms in the contract. Also, the subject of the contract you are seeking specific performance for must be unique. The court will be reluctant to grant specific performance if the job you want done is replaceable and can be fulfilled through an alternative method. The court will try their best to avoid forcing people against their will. It is also important to have what the court calls “clean hands” when seeking a specific performance remedy. The court will not grant a specific performance remedy if the plaintiff acted in bad faith. The non-breaching party needs to have acted fairly and just during the contract signing process. The bad actions of the plaintiff do not even have to be criminal for the relief to be denied.

When Specific Performance Is Not Granted

There are many situations where specific performance will not be honored. These situations usually consist of scenarios where the plaintiff will not be fully compensated by the remedy. The court will avoid specific performance in the following situations:

• It is impossible for the breaching party to fulfill the terms of the contract
• Strict adherence to the contract would harm the defendant
• The contract was created in bad faith, is invalid, or is unenforceable
• The plaintiff is also in breach of the contract
• Enforcement of the contract would require constant and impractical supervision
• The contract requires services of the defendant against his or her will
• The contract has a “termination at will” provision

Since most of the situations have to do with the sale of goods, specific performance is regulated by the UCC (Uniform Commercial Code), which is a set of laws adopted by the states. The rules on specific performance are laid out in section 2-716.

Specific Performance in Real Estate

Real estate contracts are one of the most common areas for specific performance. Every piece of land and buildings are unique and the purchasers are going to want exactly what they paid for. Therefore, financial compensation will not fully remedy the situation as well as specific performance. When someone commits a breach of contract on the sale or purchase of your dream home, it would be wise to seek a specific performance remedy that would require the breaching party to complete the sale. All specific performance remedies granted by the courts have one thing in common, uniqueness of the good being sold. That is why specific performance is so popular in real estate. Courts are often willing to reward specific performance in real estate contracts because it is impossible to find identical plots of land and homes that will put the plaintiff in the situation they would be in had the contract been fulfilled.

Enforcement of Specific Performance

Enforcing specific performance may be a difficult task. The reason you were granted the remedy is because the defendant was unwilling to fulfill the contract in the first place and getting an unwilling participant to abide can be difficult. Therefore, the court will “supervise” the transaction to make sure it is completed. When a party fails to abide by the ruling, the unwilling party can face consequences including contempt of the court, monetary penalties, fines, and other forms of censorship.

If you have a contract where the opposing party is not fulfilling their side of the deal, consider contacting an attorney to sort the problem out. If the contract involves property or real estate, specific performance is a viable option that should be considered. If the property is unique to you and you do not want to settle for anything less, ask your attorney to seek specific performance in order to finally own your dream home or property.