Contract law (2022): Remedies - Specific performance

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land law, but otherwise is not generally available if damages are an appropriate alternative. Specific performance is almost never available for contracts of personal service, although performance may also be ensured through the threat of proceedings for contempt of court.

Specific performance is commonly used in the form of injunctive relief concerning confidential information or real property. While specific performance can be in the form of any type of forced action, it is usually to complete a previously established transaction, thus being the most effective remedy in protecting the expectation interest of the innocent party to a contract. It is usually the opposite of a prohibitory injunction, but there are mandatory injunctions that have a similar effect to specific performance.

At common law, a claimant's rights were limited to an award of damages. Later, the court of equity developed the remedy of specific performance instead, should damages prove inadequate. Specific performance is often guaranteed through the remedy of a right of possession, giving the plaintiff the right to take possession of the property in dispute.

As with all equitable remedies, orders of specific performance are discretionary, so their availability depends on its appropriateness in the circumstances. Such orders are granted when damages are not an adequate remedy and in some specific cases such as land (which is regarded as unique).

Exceptional circumstances.

 An order of specific performance is generally not granted if any of the following is true:

Specific performance would cause severe hardship to the defendant.

The contract was unconscionable.

Common Law damages are readily available or the detriment suffered by the claimant is easy to substitute, then damages are adequate.

The claimant has misbehaved (unclean hands).

Specific performance is impossible.

Performance consists of a personal service 

The contract is too vague to be enforced.

The contract was terminable at will (meaning either party can renege without notice).

Note that consumer protection laws may disallow terms that allow a company to terminate a consumer contract at will (for example Unfair Terms in Consumer Contracts Regulations 1999)

The contract required constant supervision.

Mutuality was lacking in the initial agreement of the contract.

The contract was made for no consideration.

Specific performance will not be granted for contracts which are void or unenforceable. The exception to this (in equity) is in relation to estoppel or part performance.

Where an injunction to restrain an employee from working for a rival employer will be granted even though specific performance cannot be obtained. The leading case is Lumley v Wagner, which is an English decision.

Additionally, in England and Wales, under s 50 of the Senior Courts Act 1981, the High Court has a discretion to award a claimant damages in lieu of specific performance (or an injunction). Such damages will normally be assessed on the same basis as damages for breach of contract, namely to place the claimant in the position he would have been had the contract been carried out.