Sometimes there are situations where money alone cannot solve the problem. When this happens in a legal matter, specific performance may come into play. A specialized remedy used from time to time in civil courts, it’s used when the court has determined no other remedy, including money, will adequately compensate the injured party. Used in cases where there was a contract between parties, it usually involves unique situations such as real estate, works of art, things considered to be in short supply and anything custom-made.
The Equitable Remedy
Specific performance requires a defendant to follow through with a specific action they had agreed to do, rather than simply be able to pay money to a plaintiff as adequate compensation. In essence, the defendant is forced to keep a promise made earlier. Thus, it has become known as the “equitable” remedy within civil court. In most civil suits, the plaintiff is seeking monetary damages as compensation for being wronged. However, if the case involves something such as a one-of-a-kind piece of jewelry they were expecting to receive, getting money is not the goal. Rather, the goal is to be awarded the jewelry. If the court determines there was a legally binding agreement for the jewelry to be sold to the plaintiff at a certain price, the court would then order the defendant to follow through on the sale. By doing this, the plaintiff is considered to have been made “whole” from the breach of contract.
When Specific Performance is Avoided
Considered similar to an injunction, there are times when a court will decide not to award specific performance even when monetary damages will not be adequate compensation. Times when specific performance are avoided include:
- When it is simply impossible
- When the defendant would suffer harm
- It would require constant supervision
- The contract states it can be terminated at will by either party anytime
- The contract is for services, and making someone perform a service involuntarily would result in poor performance
- Plaintiff did not hold up their end of the bargain
- The contract is defective and would make specific performance unfair to defendant
When at all possible, courts will award monetary damages rather than enforce specific performance because they are easier to enforce and don’t require someone to act in a way they are unwilling to do so.
Failing to Deliver Specific Performance
So what happens when a party who is ordered to perform specific performance chooses to ignore the court’s ruling? While it’s usually not jail time, failing to follow through with the court’s ruling can mean a number of consequences including substantial fines, monetary penalties and being held in contempt of court. While jail time is not an immediate option, if the contempt of court goes on long enough it is something that may become a possibility.
When entering into a contract of any kind, it’s imperative to make sure everything is clearly understood by both parties. Even when this is the case, there are times when a situation breaks down and individuals find themselves at odds with one another. When this happens, a lawsuit is often the result. Depending upon what was at stake in the contract, specific performance may be a possibility if the court rules for the plaintiff. Keeping this in mind may enable both parties to work out a compromise before ending up in court.
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Dustin Meriwether is a freelance author and blogger who primarily focuses on Contract Law, Business Law, Commercial Litigation, Securities Litigation, Banking Law and other areas. Readers curious about the financial world are encouraged to check out the
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