Through Specific Performance
Protecting your contractual rights is paramount for businesses and individuals alike. The most commonly adopted form of remedy is monetary compensation. While damages are the standard legal relief, there exists a far more compelling equitable redress “Specific Performance”: Turner v Bladin [1951] HCA 13.
Specific performance is a court order which compels the breaching party to do what they have promised under the agreement. If you are in the middle of a contractual dispute, understanding when this remedy applies is crucial for protecting your contractual rights and ensuring you receive the true benefit of your bargain.
In breach of contract cases, monetary damages aim to put the injured party in the position they would have been in had the contract been performed. This remedy is used when monetary damages are inadequate to rectify the harm caused by a breach of contract.
Specific performance provides an equitable remedy granted when damages fall short, for example, when the subject of the contract is unique, irreplaceable, or when compensation simply cannot restore the true value of the bargain.
When Specific Performance Applies to Protect Your Contractual Rights
Courts are inclined to order specific performance when damages fall short, For example, if the contract involves something inherently unique or impossible to replicate on the open market:
- Real Estate is usually considered one-of-its-kind. If a seller refuses to transfer ownership, a court may order specific performance, compelling them to sell the property to the buyer, thereby enforcing the buyer’s contractual rights.
- Unique Goods & Custom-Made Items to a buyer’s specifications, such as custom-designed artwork.
- Rare & Irreplaceable items in short supply.
What Must You Prove to Enforce Your Contractual Rights?
Specific performance isn’t automatic. To successfully obtain this order, you must satisfy certain prerequisites, demonstrating a clear entitlement to the enforcement of your contractual rights:
1. A Valid, Enforceable Contract: A legally binding agreement with sufficiently clear terms (Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57).
2. Material Breach: The other party has failed to perform a significant obligation under the contract (Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57).
3. Inadequacy of Damages: You must also demonstrate that monetary compensation alone is INSUFFICIENT to provide a just remedy (Coulls v Bagot’s Executor & Trustee Co Ltd [1967] HCA 3).
Grounds for Denial
Specific performance is discretionary. Courts balance fairness with practicality. This remedy will be barred where there is:
- Undue Hardship: Enforcement would impose a severe, disproportionate burden on the defendant (Norton v Angus [1926] HCA 35).
- Unclean Hands: Where plaintiff acted unconscionably, or in bad faith in relation to the contract. This echoes the principle “He who comes into equity must come with clean hands”.
- Vagueness or Unfairness: Where the contractual terms are too ambiguous or unconscionable to enforce.
- Inadequacy of Damages: Where money can sufficiently compensate the plaintiff, specific performance is inappropriate.
Strategic Considerations
Choosing to pursue a specific performance claim can be a strategic movement:
- True Remedy: Importantly, specific performance delivers the exact benefit you have bargained for. It delivers the exact benefit bargained for, which is applicable to unique assets, such as a particular property sale where a seller refuses to transfer ownership. A court may order specific performance, compelling the seller to sell the property to the buyer; or where you have a contract for the sale of a unique or custom-made product.
- Complexity & Cost: Equitable litigation can be potentially more costly than straightforward damages claims.
- Judicial Discretion (Co-operative Insurance Society Ltd v. Argyll Stores [1997] UKHL 17):The outcome is less predictable due to court’s broad discretion based on fairness.
In conclusion, specific performance stands as a vital safeguard for contracts involving unique subjects where monetary damages are a hollow substitute. It upholds the principle that promises are meant to be kept, not merely paid for, thereby reinforcing contractual rights. While specific performance is not a universal solution applicable in every scenario, its strategic pursuit can be essential for clients whose contractual expectations centre on obtaining something truly irreplaceable. It is a powerful tool for enforcing contractual rights.
Specific performance stands as a vital legal safeguard for contracts involving unique property or rights where monetary damages are a hollow substitute. It upholds the fundamental principle that some promises are meant to be kept, not merely paid for. While not a universal remedy, its strategic pursuit can be essential for clients whose contractual expectations centre on obtaining something truly irreplaceable.
Need Legal Advice to Enforce Your Contractual Rights?
Contact us to arrange a consultation with our lawyer to review your contract; advise you of your rights for failure of a party to meet their obligation; or assess whether the remedy of specific performance is available to you.
