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What is specific performance in a contract dispute?

On Behalf of | Mar 19, 2024 | Contract Disputes

Contracts are designed to protect everybody involved in a transaction. After all, they define each party’s rights, expectations and obligations under the agreement.

When a breach of contract does occur, the “cure” or remedy is usually calculated in dollars and cents. The breaching party is usually required to pay up and cover the losses the breach caused the other party.

What happens, however, when money won’t do the trick? This is when specific performance may be the only appropriate remedy.

Understanding specific performance

Money isn’t everything. There are times when a contract involves something so unique that an aggrieved party may ask the court to enforce the contract and compel the breaching party to complete their end of the bargain. 

For example, specific performance might be an appropriate request in cases involving:

  • Real estate: Imagine you’ve entered into a contract to purchase a lovely historic home that has some unique architectural features – but the seller decides to back out of the deal at the last minute. In this scenario, you could seek specific performance to force the seller to go through with the sale.
  • Intellectual property: Suppose you’ve signed a licensing agreement with a software developer to use their proprietary software for your business. However, the developer fails to deliver. Nobody else makes anything similar. In such a case, you could seek specific performance to compel the developer to deliver the software as promised.
  • Employment contracts: Consider a scenario where your employee has a non-compete clause in their employment contract – but the employee resigns and immediately joins a local competitor’s team, putting your company’s proprietary information at risk. You could seek specific performance to enforce the non-compete clause and prevent the employee from putting your business at risk.

Anybody who ever said that “contracts are made to be broken” wasn’t counting on a court ordering specific performance. Legal guidance can help you determine if this is an option for you.