What Is 'Specific Performance' as a Legal Remedy?

You may consider a few legal remedies when another party has breached its contractual obligation. However, sometimes, a monetary remedy doesn't make the plaintiff whole, which is the goal of an equitable remedy.

When monetary damages are not an adequate remedy, courts can order defendants in contract disputes, such as those arising from business contracts, to perform the original terms of the contract. This is specific performance.

For example, in a dispute over real property where one person has changed their mind about selling a house, a court can order that the real estate contract be honored. The judge will require that the purchase go through, even if earnest money has already been exchanged.

Specific Performance: Overview

Specific performance is a type of remedy used by courts when no other remedy, including equitable relief, will adequately compensate the other party. If a legal remedy will put the injured party in the position they would have enjoyed had the contract been fully performed, then the court will use that option.

The most common reason courts grant specific performance is that the subject of the contract is unique. For instance, when a contract is for the sale of a property, mere monetary damages may not remedy the purchaser's situation.

Example: Rina offers to buy Beth's house, and Beth accepts but later decides to keep the property. Real estate is unique. Since no other piece of property or house is exactly like Beth's, Rina can claim specific performance on the contract. Beth will have to go through with the sale at the original purchase price if the court orders her to do so.

Specific Performance and 'Replevin'

Replevin, commonly called "claim and delivery," refers to a court-ordered transfer of actual property. It's a contract remedy similar to specific performance. It's often used interchangeably in statutes.

For instance, the Uniform Commercial Code (UCC) states that a buyer "has a right of replevin for goods identified to the contract if after reasonable effort he is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing."

In other words, a court may order the transfer of actual goods -- replevin -- as a remedy of specific performance in a contract dispute. This happens when compensatory damages, such as cash, are insufficient to cover the damages.

When is Specific Performance Ordered?

Courts will enforce specific performance only if the contract is fair and equitable.

Apart from real estate, courts have ordered specific performance for:

• Works of art
• Custom-made products
• Goods in short supply

Nearly all states have adopted the UCC. The UCC addresses specific performance. For example, California law states that specific performance may be compelled if:

• Specific performance of a contract is an appropriate remedy, and
• The other side has substantially performed its obligations, or future performance is assured

The second requirement ensures that the nonbreaching party also has performed or will perform its obligations specified by the contract.

As you can see, a specific performance order is mainly at the court's discretion.

Talk to an Attorney About Your Breach of Contract Case

Typically, the best time to hire an attorney is before a legal action occurs. A lawyer experienced in business law and contract law can provide helpful legal advice and avoid legal vulnerabilities. But if you or your business are facing a lawsuit or need to file a lawsuit, working with a business lawyer is your best bet. Contact a local small business attorney to protect your business's integrity and future success.