Specific performance: Overview, definition and example
What is specific performance?
Specific performance is a legal remedy in contract law that requires a party to fulfill their responsibilities under a contract as agreed, rather than paying damages for failing to do so. It’s typically used when monetary compensation (damages) is inadequate to resolve the issue, especially when the subject of the contract is unique or irreplaceable.
Why is specific performance important?
Specific performance is important because it allows the injured party to get exactly what was promised in the contract, rather than just a financial settlement. This remedy is particularly relevant in situations involving unique goods, real estate, or services that can’t be easily substituted. It ensures that the other party is legally compelled to deliver on their promises when damages alone wouldn't be enough to make the other party whole.
Understanding specific performance through an example
Imagine you enter into a contract with a seller to purchase a one-of-a-kind painting. The seller then decides not to sell the painting. If you seek damages, you might not be able to replace the exact painting, so you would be left with only a financial remedy, which wouldn't fully compensate for the loss. In this case, you could request specific performance, meaning the seller would be legally required to go through with the sale and deliver the painting.
Another example could involve a real estate transaction where a buyer agrees to purchase a unique property, but the seller tries to back out. Since the property is unique and not easily replaced by another similar property, the buyer may seek specific performance to force the seller to complete the sale.
An example of a specific performance clause
Here’s how a specific performance clause might look in a contract:
"In the event of a breach of this Agreement, the non-breaching party may seek specific performance, requiring the breaching party to fulfill their obligations under this Agreement, in addition to any other remedies available under the law."
Conclusion
Specific performance is a powerful legal remedy that ensures parties uphold their contractual promises, especially when the subject matter of the contract is unique or irreplaceable. It goes beyond monetary compensation to provide a more direct and effective resolution when damages aren't sufficient. Understanding when and how specific performance can be applied helps businesses protect their interests in contracts.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.