All parties that sign a contract, including you, are expected to fulfill certain responsibilities.
If one of the parties doesn’t carry out their obligations under the agreement, they’ll have breached the contract.
In the event of a breach, you have the right to file a lawsuit for damages against the at-fault parties. If you successfully sue them, the court will likely award you money to cover any losses you suffered as a result of them not honoring their obligations.
Money damages, however, may not always provide sufficient relief for losses resulting from contract violations. If your contract allows for it, you may obtain specific performance if you’re involved in an agreement dispute, and feel that monetary compensation will not put you in the same situation you would have been had the contract been fully executed.
Specific performance is a court order mandating the parties to a contract meet the terms of their agreement by offering the specific contracted service or product rather than paying damages.
When Can a California Court Order Specific Performance?
Specific performance is often sought as a remedy in contract disputes involving unique and irreplaceable assets like real estate, art, collectibles, etc.
Example of Specific Performance in Real Estate
You’ve been hunting for your dream home, and after much searching, you’ve finally found a one-of-a-kind beachfront property that you’ve fallen in love with.
You approach the homeowner, and following protracted negotiations, you agree on a price and sign the papers necessary to buy the home.
When you’re about to finalize the deal, the home seller contacts you to let you know they’re unable to proceed with the transaction and will refund any money you’ve already paid for the property purchase and a little extra to make up for the trouble you’ve gone through.
However, they’ll be in violation of the purchase agreement you made if they do this — and you might believe that the uniqueness of the home you were to purchase cannot simply be substituted by money.
With the help of a competent San Diego real estate lawyer, you can go to court and obtain specific performance, which would compel the homeowner to complete the sale as promised.
The seller may also be able to force you to acquire their home by seeking specific performance if you were the one who abruptly broke the home sale contract.
To be informed of what can happen in the event of a disagreement, if you’re a home seller or buyer, ensure you check contracts before signing them to see if a specific performance clause is present.
Specific Performance outside of Real Estate
For another illustration of how specific performance might be applied, let’s imagine you’re an art collector who spends $1M on a well-known Vincent van Gogh painting.
After sending the initial payment for the painting, the art dealer refuses to deliver it and claims they have changed their mind about selling it.
If you file a lawsuit and your sale agreement contains a specific performance clause, the seller will probably be found in breach of the contract, and the clause will be enforced, forcing them to hand over the painting to you.
If there was no specific performance clause in the contract, the seller could get away with giving you your money back for the painting.
Elon Musk currently owns Twitter, but before doing so, he attempted to back out of the $44 billion acquisition of the social media giant. His acquisition contract with Twitter contained a specific performance clause that they vowed to enforce in court to compel him to complete the purchase.
After sensing he would lose in court, Musk finalized his purchase of Twitter.
What Conditions Must Be Met for a Court to Uphold a Specific Performance Clause in a Contract?
To obtain specific performance in a contract breach case in California, the wronged party must:
- Show proof of an enforceable contract, such as a real estate purchase agreement. The parties must have freely agreed to the terms of the contract, and each party’s obligations must be reasonable and explicit.
- Demonstrate that the party they wish to be forced to adhere to the terms of a contract breached their agreement.
- Prove they’ve fulfilled their end of the bargain and that they’re still capable of doing so. For instance, if you were purchasing a property, you could present the court with your mortgage documentation to demonstrate that you have financing in place to pay for the property.
- Present a compelling argument to the judge as to why monetary damages are inadequate as compensation.
Even if you can demonstrate some or all of the above points, it’s at the judge’s discretion to decide whether or not a specific performance is necessary given the facts of your case.
A court may deny specific performance, for instance, if the seller of the home you were planning to purchase abruptly backed out of the deal, but the home was in an apartment complex with several other similar properties up for sale. They may rule that financial compensation is adequate even though there was a contract breach involving real estate, because you can buy the exact kind of property you wanted within the same building.
Note, even if specific performance isn’t included in your contract, a judge may still order it if you file a breach of contract lawsuit.
Gallagher Krich, APC: Experienced San Diego, CA, Specific Performance & Real Estate Attorneys
The attorneys at Gallagher Krich have more than 30 years of combined legal experience, and they’ve won many cases involving claims for specific performance in court.
Fill out our online contact form or give us a call at (858) 926-5797 to arrange a free, no-obligation consultation if you’re involved in a contract dispute and want to obtain specific performance.
When you get in touch, one of the knowledgeable attorneys at Gallagher Krich, APC, will assess the viability of your specific performance claim and counsel you on your next course of action.
Reach out to us today, and we’ll be pleased to address your concerns about specific performance and create a customized plan for resolving your contract dispute as quickly as possible.
