I am a Business Owner in England and Wales. How Does Specific Performance Work in Contractual Disputes?

If you find yourself facing a contractual dispute, you may consider the range of options available if you are considering taking the issue to court. One of the possible remedies that you can receive is called ‘specific performance’. Specific performances are one remedy available to you and are different to injunctions. Due to its many benefits, many business owners will prefer to go to court to try and get awarded specific performance instead of trying other dispute resolution methods, such as alternative dispute resolution or litigation. This article will touch on what specific performance is. It will also give some examples of specific performance and discuss when specific performance may be available for your business. 

What is Specific Performance?

Monetary damages are the typical remedy that a court will give an injured party for a breach of contract. In some instances, however, monetary damages are not an adequate remedy. Therefore, specific performance is a remedy that a court may award if it believes that awarding monetary compensation would be inadequate. Specific performance forces the party that has breached their contractual obligation to complete their promises. This means that if a court believes they cannot provide a remedy through compensation, they may make the guilty party fulfil their contractual obligations through specific performance. 

Examples of Specific Performance

Courts often reward the remedy of specific performance for sale of land contracts. For example, imagine that you purchase a certain piece of land. However the other party then decides to not sell the land to and to keep it instead. In that case, the seller is in breach of the contract. Consequently, when you take them to court, you may be able to get specific performance. This is because the land itself is a unique type of property. Importantly, land is unique as you cannot obtain an identical piece of land to the one you purchased. Therefore, specific performance would mean that the other party is obliged to sell you the land, as agreed in the contract. Another scenario where this remedy could apply is the attempted sale of a unique item, such as a vintage vase.

Additionally, a court may give specific performance in some cases where the contractual obligation is for repeat payment. For example, imagine that you are in an agreement where the other party will give you £100 every week for the next 52 weeks. If there is a good reason for needing those payments weekly instead of in a lump sum, a court may award the specific performance of monthly payments. 

Importantly, however, a court will avoid awarding specific performance if it involves making the other party doing something positively. In those cases, it is usually considered too much of a burden. Therefore, a monetary award is given instead. 

How Can My Business Use Specific Performance?

First, specific performance is a remedy given by the court. This means that you will need to take a case to the court to be able to access it. This will usually entail high court fees and lawyer fees. As a result, it is a good idea to seek professional legal advice from an early stage. By doing so, you can gauge how likely you are to receive specific performance.

Secondly, taking your case to court does not guarantee specific performance. This is because it is an equitable remedy. What this means in practice is that the court has discretion as to whether to give it to you or not. They will typically look at what the innocent party has done when deciding whether to give an equitable legal remedy. Therefore, they will take your general behaviour and business relationship with the other party into account. 

Key Takeaways

As a business owner taking a case to court, you will want to consider the prospect of getting specific performance. Specific performance can be a great way of getting the other party to meet their contractual obligations. However, it is worth keeping in mind that obtaining this reward is not straightforward. This is because the court will exercise discretion when deciding whether to grant it or not. Additionally, taking your case to court will usually mean high court and lawyer fees. This is significant as costs can build up and hurt your business’ cash flow. Therefore, it is a good idea to seek professional legal advice from an early stage. Importantly, this will enable you to have a good idea as to the type of remedies that you may get from going to court.

If you need more information, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584  or visit our membership page.

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