Specific Performance: When Money Is Not Enough
What Is Specific Performance?
Specific performance is a court-ordered remedy that requires the breaching party to actually fulfill their contractual obligations, rather than simply paying money damages. It is an equitable remedy, meaning the court grants it at its discretion when monetary compensation would be inadequate.
When Courts Order Specific Performance
Specific performance is not available for every breach. Courts typically order it when:
- The subject matter is unique. Real estate is the classic example — every parcel of land is considered unique, so money damages cannot truly compensate a buyer denied a specific property.
- Monetary damages are inadequate. If the non-breaching party cannot obtain a substitute elsewhere, money alone does not make them whole.
- The contract terms are clear. Courts will not order specific performance if the obligations are too vague to enforce.
Common Contexts
- Real estate transactions. Buyers frequently seek specific performance when sellers refuse to close. Courts routinely grant it because each property is unique.
- Rare goods. Contracts for unique artwork, antiques, or limited-edition items may warrant specific performance.
- Business acquisitions. In M&A disputes, courts may order completion of a deal when the target company's value is difficult to quantify.
When Courts Refuse
Courts generally will not order specific performance for:
- Personal service contracts. Forcing someone to work for another raises involuntary servitude concerns. Instead, courts may issue a negative injunction preventing the person from working for a competitor.
- Contracts where supervision is impractical. If enforcing performance requires ongoing court oversight, courts prefer damages.
- Situations where the requesting party acted inequitably. Under the "clean hands" doctrine, a party seeking equity must itself have acted fairly.
What to Watch For
- Specific performance clauses. Some contracts include provisions stating that the parties agree specific performance is an appropriate remedy for breach. While not binding on the court, these can be persuasive.
- Waiver of specific performance. Conversely, some contracts attempt to waive the right to seek specific performance, limiting remedies to damages only.
When to Consult a Lawyer
Consider consulting an attorney if you need the other party to actually perform their obligations rather than just pay you, especially in real estate transactions or deals involving unique assets.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.