Specific Performance

An extraordinary equitable remedy that compels a party to execute a contract accord

ing to the precise terms agreed upon orto execute it substantially so that, under the c
ircumstances, justice will be done between the parties.
Specific performance grants the plaintiff what he actually bargained for in the contrac
t rather than damages (pecuniarycompensation for loss or injury incurred through the
unlawful conduct of another) for not receiving it; thus specificperformance is an equit
able rather than legal remedy. By compelling the parties to perform exactly what they
had agreed toperform, more complete and perfect justice is achieved than by awardi
ng damages for a breach of contract.
Specific performance can be granted only by a court in the exercise of its Equity po
wers, subsequent to a determination ofwhether a valid contract that can be enforced
exists and an evaluation of the relief sought. As a general rule, specificperformance i
s applied in breach of contract actions where monetary damages are inadequate, pri
marily where the contractinvolves land or a unique chattel (Personal
Property). Damages for the breach of a contract for the sale of ordinary personalpro
perty are, in most cases, readily ascertainable and recoverable so that specific perfor
mance will not be granted.
An important advantage to this remedy is that, since it is an order of an equity court, i
t is supported by the enforcementpower of that court. If the defendant refuses to obe
y that order, she can be cited for criminal Contempt and even imprisoned.The defen
dant can also be cited for civil contempt for continuing to refuse to obey the order an
d can be incarcerated until sheagrees to obey it. In such a situation, it is said that "sh
e has the keys to freedom in her pocket," which signifies that thedefendant can relea
se herself by complying with the court order. These enforcement powers are one of t
he principal reasonswhy plaintiffs seek specific performance of contracts.
Right to Specific Performance
Specific performance is ordered only on equitable grounds in view of all the condition
s surrounding the particular case. Thedetermining factor is whether, in equity and go
od conscience, the court should specifically enforce the contract because thelegal re
medy of monetary damages would inadequately compensate the plaintiff for the loss.
Valid Contract
The remedy of specific performance presupposes the existence of a valid contract b
etween the parties to the controversy.The terms of the contract must be definite and
certain. This is significant because equity cannot be expected to enforceeither an inv
alid contract or one that is so vague in its terms that equity cannot determine exactly
what it must order eachparty to perform. It would be unjust for a court to compel the
performance of a contract according to ambiguous termsinterpreted by the court, sin
ce the court might erroneously order what the parties never intended or contemplate
d.
Plaintiff's Conduct
A plaintiff seeking specific performance of a contract must have contracted in Good
Faith. If the plaintiff has actedfraudulently or has taken unfair advantage of superior
bargaining power in drafting extremely harsh contract terms withrespect to the defen
dant, the plaintiff has thereby contravened the doctrine of clean hands. Under that do
ctrine, the court willdeny relief to a party who has acted unjustly in regard to a transa
ction for which that party is seeking the assistance of thecourt.
A classic example of the clean hands doctrine involved Charles Flowers, an outstand
ing college football player who wasdrafted by the New York Giants and Los Angeles
Chargers. In November 1959, he signed to play football with the Giants.According to
the college rules, however, any player who signed a contract to play for a profession
al team was ineligible forfurther intercollegiate games. Because Flowers wanted to pl
ay in the Sugar Bowl on January 1, 1960, he and the Giantsagreed to keep his signin
g of the contract confidential, deceiving his college, the opposing team, and the footb
all public ingeneral. One of the terms of the contract provided that it was binding only
when approved by the commissioner of football.Part of the plan was that the contrac
t would not be submitted for approval until after January 1. Flowers subsequentlyatte
mpted to withdraw from the contract, but the Giants promptly filed it with the commis
sioner, who approved it on December15. Public announcement was withheld until aft
er January 1.
On December 29, Flowers negotiated a better contract with the Chargers and signed
it after the Sugar Bowl game. Henotified the Giants on December 29 that he was wit
hdrawing from his contract with them and returned his uncashed bonuschecks. The
Giants sought specific performance of their contract with Flowers. The court denied r
elief because the Giantsdid not come into equity with clean hands (New York Footbal
l Giants, Inc. v. Los Angeles Chargers Football Club, Inc., 291F.2d 471 [5th Cir. 1961
]).
Equitable relief will be denied to anyone who has acted unjustly or with bad faith in th
e matter in which she seeks relief,irrespective of any impropriety in the behavior of th
e defendant. The misconduct does not necessarily have to be of suchnature as to be
punishable as a crime or to justify any legal proceedings. Any intentional act concer
ning the Cause of
Actionthat violates the standards of fairness and justice is sufficient to prohibit the gr
anting of equitable relief. The Giants clubaccepted from Flowers what it claimed to b
e a binding contract, but it agreed that it would represent to the public that therewas
no contract in order to deceive others who had a material interest in the matter. If the
re had been a straightforwardexecution of the contract, followed by its filing with the
commissioner, none of these legal problems would have existed. TheGiants created
the situation by their devious conduct and, therefore, had no right to obtain relief fro
m a court of equity. Thecourt refused to specifically enforce the contract.
At all times, a plaintiff must be willing to "do equity," which means that the plaintiff mu
st fulfill whatever equitable obligationsthe court imposes upon her in order to do what
is just and fair to the defendant. A person will be granted specificperformance only if
that person has done, has offered to do, or is ready and willing to do all acts that we
re required of her toexecute the contract according to its terms.
Inadequate Legal Remedy
Specific performance will be denied where money would adequately compensate the
plaintiff for the loss. The courtdetermines whether money would be adequate after e
xamining the subject matter of the contract itself. If it is land, money isinadequate be
cause land is traditionally viewed as being unique, in that no two parcels of land are
exactly alike. An award ofdamages will not enable the plaintiff to acquire the same p
arcel of land anywhere else.
If the contract involves the sale of ordinary chattels—
such as furniture, appliances, or machinery—
rather than land, thegeneral measure of damages for breach of contract is the differe
nce between the market price and the contract price.Damages are adequate since th
e item could be easily repurchased on the open market and the buyer would becomp
ensated for the amount he was compelled to spend in excess of the original contract
price. The Uniform Commercial
Code (UCC) (a body of law adopted by the states that governs commercial transacti
ons) permits specific performance for thebreach of a sales contract for goods under li
mited circumstances.
Specific performance will be granted where the contract involves a unique chattel; th
e court determines whether a chattel isunique. A rare stamp collection is a unique ch
attel for purposes of specific performance, whereas stock listed on the NewYork or A
merican Stock Exchange is not unique. Antiques, heirlooms, or one-of-a-
kind items are considered unique becausemoney cannot replace their value to the pl
aintiff. The claim that an object has sentimental value to the plaintiff is not, in and ofit
self, sufficient to justify specific performance. When the sentiment or personal desire
for the object is based upon facts andcircumstances that endow the item with a speci
al value so that it becomes a family heirloom, specific performance will begranted.
Damages are inadequate if the estimate is difficult to make, such as in a requirement
s contract—
a written agreementwhereby one party assents to purchase from the other all the me
rchandise of a designated type that he might require for hisbusiness. The same princ
iple applies where the chattel is scarce and cannot be readily repurchased on the op
en marketeven though it is not unique. Where the same contract combines unique a
nd ordinary items, the entire contract will bespecifically enforced.
As a general rule, breaches of personal service contracts are compensated at law by
damages unless the services areunique. In such a case, the contract usually contain
s a negative covenant that prohibits a person from practicing herprofession or perfor
ming those unique services for anyone else within a certain distance from a former e
mployer for aspecified period of time. The employer would seek to specifically enforc
e this negative Covenant against the person whoviolates it. These provisions, somet
imes called covenants not to compete, are enforced only if they are reasonable in sc
ope;otherwise monetary damages are awarded. A court will never specifically enforc
e an employment contract by ordering anemployee to work for an employer because
the Thirteenth Amendment to the Constitution prohibits Slavery.
Insolvency of the defendant, which prevents the plaintiff from collecting damages, do
es not determine whether specificperformance will be granted. The court ascertains
only whether an adequate legal remedy exists, not whether the defendanthas the fin
ancial resources to pay the judgment.
Supervision of Performance
As a general rule, equity will not order acts that it cannot supervise. In many instance
s, specific performance is denied wherecourts would be unduly burdened with the ta
sk of supervising the performance. Supervision is a particular problem in buildingor r
epair contracts because the court lacks the technical expertise, means, or agencies t
o learn exactly what tasks thecontractor is performing or whether she is performing t
hem properly.
There are, however, certain exceptions to this rule. If the plans for the building are cl
early defined, or if there has beensufficient partial performance so that supervision of
the remainder is not difficult, the court might grant specific performancefor its compl
etion. An attempt to enforce a building repair contract is more problematic for the cou
rt. It must initially determinewhat repairs are to be made and the time within which th
ey are to be performed; then it must decide whether there has beensubstantial perfor
mance and, if not, whether the defendant had any excuse. Usually an adequate rem
edy at law exists in theform of damages that represent the excess of the construction
cost paid over the original contract price. Where damages areinadequate, however,
the court can order specific performance.
Defenses
A contract that is unenforceable because it has not complied with the Statute of
Frauds (an old English
Law, adopted in theUnited States, that requires certain contracts to be in writing) can
not be enforced through specific performance.
Laches is an equitable defense (matter asserted to diminish a plaintiff's cause of acti
on or to defeat recovery) that preventsthe enforcement of a contract by specific perfo
rmance. Laches is an unreasonable delay in asserting a right with the resultthat its e
nforcement would cause injury, prejudice, or disadvantage to others. Laches is appli
ed only where enforcement of aright will cause injustice.
The doctrine of clean hands is a defense in an action for specific performance. As ex
plained in the discussion of the case ofCharles Flowers, a court will deny specific per
formance if the plaintiff has acted in bad faith or fraudulently in the sametransaction f
or which he is seeking relief.
A contract might not be specifically enforced if, as a result of superior bargaining pow
er, the plaintiff takes unfair advantage ofthe defendant who is in a debilitated position
. This situation transpires when the consideration (the inducement to enter into acont
ract) is so inadequate as to "shock the conscience," or when "sharp dealings" are inv
olved, such as where the defendantis ill. Failure to disclose material facts to the defe
ndant that, if revealed, would have prevented a contract from being made isa ground
to deny specific performance.
Mistakes and misrepresentations in the terms of a contract might constitute a defens
e against specific performance. If suchmistakes are sufficient to justify Rescission of
a contract, they are sufficient to prevent the enforcement of the contract. Acourt will
enforce only a contract with definite and certain terms.