Specific performance is an equitable remedy that can be ordered by a court when a contract is breached. Specific performance forces the breaching party to perform the contract pursuant to the terms of the contract.
Elements of specific performance:
- Contract – Existence of a valid contract must be proven by clear, definite, and certain evidence.
- Complied with conditions – Non-breaching party complied with the conditions of the contract and performed its obligations under the contract or was excused from performing because of the breaching party’s anticipatory breach. The non-breaching party must have been ready, willing, and able to close the transaction.
- Failure to perform – The Defendant failed to perform Defendant’s obligations under the contract.
- Inadequate remedy – Money damages are an inadequate remedy.
To defend against specific performance, the first step is to show that one or more of the above elements was not met by the party seeking specific performance.
Potential defenses to specific performance include:
Statute of Frauds – Real estate contracts must be in writing and signed by both parties.
Impossibility of performance – Circumstances during the contract period changed to the point that the contract could not be performed. Even if the parties wanted to perform, it was impossible.
Illegality – The defendant did not perform under the contract because the terms or subject matter in the contract broke a law or policy.
Mistake – A party or both parties entered the contract based on a mistake.
Misrepresentation – The breaching party entered the contract because of a misrepresentation related to the property.
Unclean hands – The party seeking specific performance did not fulfill its obligations under the contract or has done something unlawful.
Undue hardship – Specific performance is not a practical remedy for the situation because the party being forced to perform the contract will suffer undue hardship.
Laches – There is unreasonable delay in the party’s claim of specific performance.