Suit for Specific Performance
Introduction
When a contract is breached, the injured party usually receives damages (money compensation). However, in some situations money cannot properly compensate the loss.
In such cases, the court may order the defaulting party to actually perform the contract. This remedy is called specific performance.
Meaning / Definition
Specific performance is a remedy where the court orders a party to carry out the exact promise made in the contract.
It is considered an equitable remedy (a remedy based on fairness) and is granted at the discretion of the court. This means the court decides whether it is fair and appropriate to grant this remedy.
Specific performance is generally granted when damages (money compensation) are not adequate, especially when the subject matter of the contract is unique or cannot easily be replaced.
Situations Where Specific Performance May Be Granted
When the Subject Matter is Unique
Specific performance is often granted when the thing promised in the contract is unique or rare, and the injured party cannot easily obtain a substitute.
Examples include:
- Sale of land
- Rare goods
- Special machinery
When Monetary Compensation is Not Adeate
If paying money cannot properly compensate the injured party for the loss, the court may order actual performance of the contract.
When the Plaintiff is Ready and Willing to Perform
The person asking for specific performance must show that they are ready and willing to perform their own part of the contract.
When the Order Will Not Cause Unfair Hardship
The court will also consider whether ordering performance would cause unfair difficulty or hardship to the other party.
When No Third Party Rights Are Affected
Specific performance is usually refused if granting the order would harm the rights of another person who is not part of the contract.
Important Case Law
Nutbrown v Thornton
The claimant entered into a contract to purchase a particular type of machinery from the defendant. The defendant later refused to deliver the machines.
The defendant was the only manufacturer of that machinery, and the claimant could not buy it elsewhere.
The court granted specific performance, because money damages would not adequately compensate the claimant.
Distinction Between Specific Performance and Damages
| Basis | Specific Performance | Damages |
|---|---|---|
| Meaning | Court orders actual performance of the contract | Court awards money compensation |
| Nature | Based on fairness (equitable remedy) | Legal remedy |
| Purpose | To enforce the exact promise made | To compensate for financial loss |
| When granted | When damages are not sufficient | Usually the normal remedy for breach |
Practical Example
A agrees to sell a particular piece of land to B. Later, A refuses to complete the sale.
Since land is unique and cannot be exactly replaced, the court may order specific performance, requiring A to transfer the land to B as promised.
Summary
- Specific performance is a remedy where the court orders a party to perform the contract as promised.
- It is an equitable remedy (based on fairness) granted at the discretion of the court.
- It is usually granted when money damages are not sufficient to compensate the loss.
- It commonly applies to contracts involving unique property such as land or rare goods.
- The person requesting it must be ready and willing to perform their own obligations.
- The court will refuse the remedy if it causes unfair hardship or affects third-party rights.