Specific performance
Encyclopedia
Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential information or real property. While specific performance can be in the form of any type of forced action, it is usually used to complete a previously established transaction, thus being the most effective remedy in protecting the expectation interest of the innocent party to a contract. It is usually the opposite of a prohibitory injunction
but there are mandatory injunctions which have a similar effect to specific performance.
Under the common law
, specific performance was not a remedy, with the rights of a litigant being limited to the collection of damages. However, the court of equity
developed the remedy of specific performance as damages often could not adequately compensate someone for the inability to own a particular piece of real property
, land being regarded as unique. Specific performance is often guaranteed through the remedy of a right of possession, giving the plaintiff the right to take possession of the property in dispute. However, in the case of personal performance contracts, it may also be ensured through the threat of proceedings for contempt of court
.
Orders of specific performance are granted when damages are not an adequate remedy, and in some specific cases such as land sale. Such orders are discretionary, as with all equitable remedies, so the availability of this remedy will depend on whether it is appropriate in the circumstances of the case.
Additionally, in England and Wales
, under s. 50 of the Supreme Court Act 1981, the High Court
has a discretion to award a claimant damages in lieu of specific performance (or an injunction
). Such damages will normally be assessed on the same basis as damages for breach of contract, namely to place the claimant in the position he would have been had the contract been carried out.
However, the limits of specific performance in other contexts are narrow. Moreover, performance that is based on the personal judgment or abilities of the party on which the demand is made is rarely ordered by the court. The reason behind it is that the forced party will often perform below the party's regular standard when it is in the party's ability to do so. Monetary damages are usually given instead.
Traditionally, equity would only grant specific performance with respect to contracts involving chattels
where the goods were unique in character, such as art, heirlooms, and the like. The rationale behind this was that with goods being fungible
, the aggrieved party had an adequate remedy in damages for the other party's non-performance.
In the United States, Article 2 of the Uniform Commercial Code
displaces the traditional rule in an attempt to adjust the law of sales of goods to the realities of the modern commercial marketplace. If the goods are identified to the contract for sale and in the possession of the seller, a court may order that the goods be delivered over to the buyer upon payment of the price. This is termed replevin
. In addition, the Code allows a court to order specific performance where "the goods are unique or in other proper circumstances", leaving the question of what circumstances are proper to be developed by case law
.
The relief of Specific Performance is an equitable relief which is usually remedial or protective in nature.
In the civil law
(the law of continental Europe and much of the non English speaking world) specific performance is considered to be the basic right. Money damages are a kind of "substitute specific performance." Indeed, it has been proposed that substitute specific performance better explains the common law rules of contract as well, see (Steven Smith, Contract Law, Clarenden Law ).
In English law, in principle reparation must be done in specie unless another remedy is ‘more appropriate’.
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
but there are mandatory injunctions which have a similar effect to specific performance.
Under the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
, specific performance was not a remedy, with the rights of a litigant being limited to the collection of damages. However, the court of equity
Court of equity
A chancery court, equity court or court of equity is a court that is authorized to apply principles of equity, as opposed to law, to cases brought before it.These courts began with petitions to the Lord Chancellor of England...
developed the remedy of specific performance as damages often could not adequately compensate someone for the inability to own a particular piece of real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
, land being regarded as unique. Specific performance is often guaranteed through the remedy of a right of possession, giving the plaintiff the right to take possession of the property in dispute. However, in the case of personal performance contracts, it may also be ensured through the threat of proceedings for contempt of court
Contempt of court
Contempt of court is a court order which, in the context of a court trial or hearing, declares a person or organization to have disobeyed or been disrespectful of the court's authority...
.
Orders of specific performance are granted when damages are not an adequate remedy, and in some specific cases such as land sale. Such orders are discretionary, as with all equitable remedies, so the availability of this remedy will depend on whether it is appropriate in the circumstances of the case.
Exceptional circumstances
There are certain circumstances where an order of specific performance would not be granted. Such circumstances include:- Specific performance would cause severe hardship to the defendant
- The contract was unconscionable
- The claimant has misbehaved (unclean handsUnclean handsUnclean hands, sometimes called the clean hands doctrine or the dirty hands doctrine, is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain an equitable remedy on account of the fact that the plaintiff is acting unethically or has acted in bad faith with...
) - Specific performance is impossible
- Performance consists of a personal service
- The contract is too vague to be enforced
- The contract was terminable at will (meaning either party can renege without notice)
- The contract required constant supervision
- Mutuality was lacking in the initial agreement of the contract
- The contract was made for no considerationConsiderationConsideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
.
Additionally, in England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
, under s. 50 of the Supreme Court Act 1981, the High Court
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
has a discretion to award a claimant damages in lieu of specific performance (or an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
). Such damages will normally be assessed on the same basis as damages for breach of contract, namely to place the claimant in the position he would have been had the contract been carried out.
Examples
In practice, specific performance is most often used as a remedy in transactions regarding land, such as in the sale of land where the vendor refuses to convey title. The reason being that land is unique and that there is not another legal remedy available to put the non-breaching party in the same position had the contract been performed.However, the limits of specific performance in other contexts are narrow. Moreover, performance that is based on the personal judgment or abilities of the party on which the demand is made is rarely ordered by the court. The reason behind it is that the forced party will often perform below the party's regular standard when it is in the party's ability to do so. Monetary damages are usually given instead.
Traditionally, equity would only grant specific performance with respect to contracts involving chattels
Personal property
Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
where the goods were unique in character, such as art, heirlooms, and the like. The rationale behind this was that with goods being fungible
Fungibility
Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution, such as crude oil, wheat, precious metals or currencies...
, the aggrieved party had an adequate remedy in damages for the other party's non-performance.
In the United States, Article 2 of the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
displaces the traditional rule in an attempt to adjust the law of sales of goods to the realities of the modern commercial marketplace. If the goods are identified to the contract for sale and in the possession of the seller, a court may order that the goods be delivered over to the buyer upon payment of the price. This is termed replevin
Replevin
In creditors' rights law, replevin, sometimes known as "claim and delivery," is a legal remedy for a person to recover goods unlawfully withheld from his or her possession, by means of a special form of legal process in which a court may require a defendant to return specific goods to the...
. In addition, the Code allows a court to order specific performance where "the goods are unique or in other proper circumstances", leaving the question of what circumstances are proper to be developed by case law
Case law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...
.
The relief of Specific Performance is an equitable relief which is usually remedial or protective in nature.
In the civil law
Civil law (legal system)
Civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections, as compared to common law systems that gives great precedential weight to common law on the principle that it is unfair to treat similar facts differently on different...
(the law of continental Europe and much of the non English speaking world) specific performance is considered to be the basic right. Money damages are a kind of "substitute specific performance." Indeed, it has been proposed that substitute specific performance better explains the common law rules of contract as well, see (Steven Smith, Contract Law, Clarenden Law ).
In English law, in principle reparation must be done in specie unless another remedy is ‘more appropriate’.
See also
- DamagesDamagesIn law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
- TortTortA tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
- Clyatt v. United States, 197 U.S. 207 (1905) no specific performance on employment contracts
- Beswick v Beswick
- Tamplin v JamesTamplin v JamesTamplin v James 15 Ch D 215 is an English contract law case concerning the availability of specific performance for a breach of contract induced by mistake...