Specific performance is a remedy for contracts in which the party is required by the court to provide the contracted item or service instead of a monetary payment. It often comes into play in lawsuits over contracts for real estate and collectibles.
Learn what specific performance is, how it works, and when it might be a factor in a lawsuit.
Definition and Examples of Specific Performance
Specific performance is a court order requiring a party that caused a loss to perform their promise as closely as possible, often in cases where a cash payment can't replace what was lost.
In a typical civil lawsuit where specific performance comes up, there is a plaintiff (“claimant”) and a defendant (“respondent”). The plaintiff is the party that files the claim for losses caused by the defendant. If the court finds that the loss did occur, the judge orders the respondent to pay a remedy to fix the loss.
A common type of remedy is monetary damages, but sometimes money doesn’t solve the problem because what was lost or destroyed is unique, and this is when specific performance comes into play.
Examples of Specific Performance
Here are some examples of common situations in which a court orders specific performance:
In a real estate contract for the sale of a unique parcel of beachfront property in Florida, the court may order specific performance if the seller violates the contract by backing out of the sale. Even if the seller offers money in place of the property (a general solution), the court may insist on the seller giving the buyer the land per the contract (specific performance).
Personal property is often the subject of specific performance lawsuits because, in some cases, the property up for sale includes custom-made products, goods in short supply, and art objects. For example, if a buyer and seller agree to a contract for the purchase of the seller’s original Pablo Picasso but the seller backs out and offers a less-valuable Henri Matisse instead, the court might lean on specific performance and ask the seller to give the buyer the Picasso, per the contract.
In general, the court cannot specifically enforce contracts to perform personal services.
How Does Specific Performance Work?
Here’s an overview of the process of specific performance in a civil lawsuit:
- The process begins when a specific performance clause is written into the contract or when the initial claim is filed with the court.
- If the court upholds the claim, the judge considers all the issues and determines that specific performance is the best way to make the claimant whole.
- The judge orders the respondent to return or give back the property to the claimant.
Requirements for Specific Performance
For a court to award specific performance as a remedy, several conditions must be met:
- A valid and binding contract must be in place.
- Monetary damages must be inadequate.
- Mutual obligation must be present, meaning both parties had duties to the other under the contract.
- The injured party must show they have performed their part of the contract and can continue to do so.
The judge in a lawsuit has the discretion to grant—or not grant—specific performance as a remedy, even if it’s included in the contract. It’s not a right to either party.
Specific Performance and State Laws
Specific performance regulations are part of the Uniform Commercial Code (UCC), a set of laws for commercial and business contracts in the U.S. The Code addresses a buyer’s right to specific performance, stating that:
- Specific performance may be decreed for unique goods or in other “proper circumstances.”
- The court may include other terms and conditions for payment of the price, damages, or other relief.
- The buyer has the right to the return of the property.
Every state has adopted some part of the UCC, but state laws differ in allowing sellers of real property (land and buildings) to sue a buyer for specific performance.
Some types of contracts (including real estate contracts, in some states) must be in writing. For contracts that must be in writing, an oral contract for the sale of real estate may not be allowed, and, in this case, specific performance isn’t a possibility.
- Specific performance is a remedy to a claimant in a lawsuit that involves a unique property that can’t be replaced.
- Common types of unique property include real estate, art, collectibles, antiques, and custom-made objects.
- A court may order specific performance when monetary damages aren’t enough to compensate the injured party.
- States have differing regulations for dealing with specific performance.