In contract and real estate cases, a party who breaches an agreement may have a court-ordered obligation to carry out their contractual obligations. This form of relief, known as specific performance, may occur in cases involving unique assets where mere financial compensation will not make the non-breaching party whole from the losses caused by the breach. If you find yourself in a legal case involving claims for specific performance, turn to the team at LaFountain & Wollman P.C. With over 40 years of combined experience, our attorneys have what it takes to advocate for your rights and interests. Let us help you find and pursue legal solutions tailored to your needs and goals.
Understanding Specific Performance
Specific performance refers to a remedy a court can award in breach-of-contract cases. In most cases, the court will order the party who breached the contract to pay the non-breaching party a sum equal to the financial losses they incurred. However, in certain circumstances, money cannot adequately compensate the non-breaching party for the loss they incur due to the breach. In these cases, a court may award specific performance requiring the breaching party to perform their contractual obligations.
Common Cases Involving Specific Performance
Non-breaching parties might seek specific performance in contract cases involving:
- Real estate transactions: The law considers each piece of property unique and distinct from all other property, which may entitle a buyer to seek specific performance compelling the seller to follow through on an accepted offer or a purchase and sale agreement.
- Business sales or mergers & acquisitions: Courts may order parties to follow through with M&A transactions or asset purchase agreements for the sale of a business due to the one-of-a-kind quality of a business. Courts also order specific performance in cases involving the purchase & sale or distribution of stock/ownership interests.
- Contracts to buy unique items: A court may order the owner of a unique item, like a piece of artwork or one-of-a-kind collectible, to follow through on an agreement to sell that item because the buyer cannot buy it elsewhere due to its uniqueness.
When Do Courts Order Specific Performance?
Courts usually award specific performance in cases involving unique subject matter, where monetary compensation will not provide reasonable relief to the non-breaching party. For example, suppose an individual contracts to buy a house, but the owner backs out and refuses to follow through with the transaction. Although the court can refund the buyer the money they’ve provided to the seller, the buyer has still lost the opportunity to purchase that home. Because every piece of real estate has unique qualities, the buyer cannot buy another identical property. As a result, a court may order specific performance against the property owner, requiring them to follow through with the accepted offer or the purchase and sale agreement to sell the property to the buyer. Courts may also award specific performance in other cases involving unique items, such as artwork, antiques, collectibles, or antiquities.
Courts may order specific performance if they find that the non-breaching party has established legal elements such as:
- The existence of a valid contract: A court must first find that the parties have a valid, enforceable contract. In some cases, such as those involving real estate transactions, the contract must satisfy the statute of frauds and other legal requirements for contract validity.
- Definiteness of terms: The court must find that the parties’ contract has clear, unambiguous terms that establish the non-breaching party’s right to the requested contractual performance.
- No adequate remedy at law: A “remedy at law” refers to the right to compensation for another party’s contractual breach. However, a non-breaching party may request specific performance instead of monetary compensation if it demonstrates to the court that no amount of money can provide an adequate remedy for the contractual breach and that specific performance will provide the only fair remedy.
Defenses Against Specific Performance
A defendant in a contract case where the plaintiff has requested specific performance may raise various defenses to contest the case or challenge the imposition of specific performance instead of monetary compensation. Common defenses in specific performance cases include:
- The unenforceability of the contract: Courts will refuse to grant specific performance if they find the parties’ contract unenforceable due to lack of mutual assent or failure to meet other legal requirements.
- Unclean hands: A court may refuse to award a non-breaching party specific performance if they acted in bad faith during the parties’ contractual relationship.
- Impossibility of performance: A defendant may claim the impossibility of performing their contractual obligations, such as when a piece of artwork becomes irreparably damaged, and the owner cannot deliver it to the buyer.
- Laches: The doctrine of laches can bar a plaintiff from obtaining relief if the plaintiff waits too long to file their case. Laches may apply when a seller has already sold a unique asset to an innocent third party, as the court may find it inequitable to take the asset away from the third party.
How Can an Attorney Help You in a Specific Performance Case?
An attorney can help you with a contract or real estate case involving claims for specific performance by:
- Investigating and reviewing the facts of your case to obtain evidence supporting your position
- Explaining your rights and options to you, whether you’ve requested specific performance or want to defend against claims for specific performance
- Vigorously advocating on your behalf at the negotiating table or in mediation to pursue a favorable resolution for you, if possible
- Presenting a compelling case in court if litigation becomes necessary to protect your rights and interests
Contact Our Firm Today to Discuss Your Options
When you find yourself in a contract dispute involving a unique property, the case may involve claims for specific performance. An experienced real estate attorney from LaFountain & Wollman P.C., can help you protect and advocate for your rights and interests in your case. Contact our firm today for an initial consultation with our knowledgeable legal team to discuss your options.