Specific Performance: Legal Meaning, Enforcement, Limitations and Defences

What is Specific Performance?

Specific performance (SP) is an equitable remedy in which a court orders a party to fulfil their specific obligations under a contract rather than awarding monetary damages for a breach.

What is Specific Performance?

Understanding Specific Performance: A Dive into Legal Remedies

When delving into contract law, one of the intriguing remedies available to an aggrieved party is “specific performance.” While monetary damages often come to mind when we think of breaches of contract, SP is particularly unique.

Specific Performance Meaning

At its core, specific performance is an equitable remedy the courts provide, compelling a party to a contract to carry out the specific obligations they initially agreed to. Instead of awarding monetary damages for a breach of contract, the court orders the party to “perform” their contractual obligations as they were initially set out.

For instance, consider a situation where someone agrees to buy a unique artwork. If the seller doesn’t deliver it, monetary compensation might not suffice for the buyer due to the artwork’s irreplaceability. In such cases, a court could mandate the seller to hand over the artwork as originally agreed.

When is Specific Performance Applied?

Specific Performance (SP) is not a remedy that is granted indiscriminately. There are certain situations where it is deemed appropriate:

  • Unique Goods or Property: As in the artwork example above, when the subject of the contract is unique (like rare collectables, antiques, or real estate), specific performance might be the only suitable remedy.
  • Inadequacy of Monetary Damages: The court might resort to specific performance if monetary damages are insufficient to compensate the aggrieved party.
  • Clear and Definite Contractual Terms: The contract terms should be clear and definite enough for the court to enforce SP.

How Do Courts Address Concerns of Enforcement And Supervision When Ordering Specific Performance?

When courts consider ordering SP as a remedy, addressing concerns of enforcement and supervision is paramount to ensure that the order is both practical and just.

Firstly, courts are inclined to grant specific performance only when the contractual obligations are unequivocal, ensuring minimal ambiguity in the parties’ requirements. This clarity reduces the risk of subsequent disputes regarding compliance.

Specific Performance - contract law - law of obligations - damages

Moreover, courts are typically cautious about ordering specific performance in scenarios necessitating ongoing court supervision. Such continuous oversight can be burdensome and inefficient. For instance, contracts that require a series of acts over an extended period might be less suitable for this remedy due to the challenges in monitoring adherence.

Additionally, the feasibility of enforcement is a significant consideration. If the court believes ensuring compliance would be unduly complex or problematic, they might opt for an alternative remedy, such as monetary damages. While SP is a powerful tool, courts are mindful of its enforcement’s limitations and practicalities.

Limitations to Specific Performance

It’s worth noting that SP has its limitations:

  • Services Contracts: Courts are generally hesitant to grant specific performance in contracts for personal services. Enforcing someone to render a personal service against their will can run afoul of personal freedoms and be akin to involuntary servitude.
  • Feasibility: SP is typically only ordered if it’s feasible. If, for example, the unique item in question has been destroyed or lost, the court can’t compel its delivery.
  • Hardship: If the enforcement of specific performance places an undue hardship or is unjustly oppressive toward one party, courts might refuse to grant the remedy.
  • Mutuality of Remedy: Both parties must generally be able to seek SP against the other. Courts may hesitate to enforce the remedy if only one party can be compelled to a specific act, but the other cannot.

Significance

While it may seem that SP is a niche remedy, its existence carries significant weight in the legal world for several reasons:

  • Bargain Preservation: At their heart, contracts are about preserving bargains between parties. Specific performance ensures that the deal’s original terms are upheld, emphasising the sanctity of contracts.
  • Deterring Bad Faith Behaviour: Knowing that a court might compel specific performance can deter parties from acting in bad faith or reneging deals, especially when involving unique goods or properties.
  • Filling the Gap: In instances where money won’t do, SP provides an alternative that might satisfy the aggrieved party more fully.

Are There Any Defences Available Against A Claim For Specific Performance?

There are several defences available against a claim for SP:

  • Unclear or Vague Contract Terms: If a contract’s terms are ambiguous or not sufficiently defined, it becomes challenging to enforce specific performance.
  • Lack of Clean Hands: The “clean hands” doctrine requires that the party seeking specific performance must not engage in any misconduct in relation to the contract.
  • Laches: This defence arises when an unreasonable delay in seeking relief causes prejudice to the defending party.
  • Undue Hardship: If enforcing SP would cause disproportionate hardship to the defendant compared to the benefit to the claimant, it might serve as a defence.
  • Mutuality: It may not be granted if it isn’t available against the party seeking it.
  • Adequate Remedy at Law: If monetary damages adequately compensate the aggrieved party, specific performance might not be awarded.

Why Is Specific Performance Not Often Awarded In Employment Contracts?

Specific performance is rarely awarded in employment contracts primarily due to the personal nature of employment relationships. Enforcing specific performance in such contracts can be akin to involuntary servitude, compelling someone to work against their will, which is ethically and legally problematic.

Moreover, the success of an employment relationship depends on mutual trust, goodwill, and cooperation; forcing an unwilling employee to work or an employer to retain an employee can lead to a strained and unproductive work environment.

Additionally, unlike unique goods or property, employment skills and services can often be substituted, making monetary damages a more practical remedy for breaches. Courts are also wary of the complexities involved in supervising the enforcement of such orders.

Overall, the subjective nature of job performance and the potential challenges in enforcing SP make it an undesirable remedy in employment contexts.

In Conclusion

SP is a fascinating remedy within contract law, serving as a testament to the principle that contracts and the promises made therein should be honoured.

While it is not always the go-to solution for every contractual dispute, it remains the most effective way to ensure justice is served in certain circumstances. As with many legal principles, its application requires carefully balancing interests, rights, and fairness.

Related Articles

Subscribe
Notify of
guest

0 Comments
Inline Feedbacks
View all comments

Join Thousands of Subscribers Who Read Our Legal Opinions And Case Analysis.