Specific Performance Example: Everything You Need to Know
A specific performance example is when a party defaults on its contractual obligation and is ordered by the court to fulfill said obligations. 3 min read
A specific performance example is when a party defaults on its contractual obligation and is ordered by the court to fulfill said obligations. An alternative to the much more common award of monetary damages, specific performance is an injunction on a contract dispute often involving sensitive material or real estate. The actions ordered are usually identical or materially similar to those obligated within the contract itself.
When Specific Performance Applies
Civil courts will order specific performance in cases where monetary compensation may not be the most equitable remedy. The term applies specifically to cases of a contract breach. In these cases, the burden of proof is on the plaintiff to show he is not made "whole" by monetary damage awards alone. Instead, the court will order the defendant to do what he has promised to do in the contract. These cases are unusual, as most of the time monetary damages satisfy the plaintiff's case equitably.
Specific Performance Examples in Commercial Transaction
Uniform Commercial Code (UCC) is a set of laws adopted by states that govern all aspects of commercial transactions, including specific performance. UCC statutes often use the term "replevin" interchangeably with specific performance. In simple terms, replevin refers to a case in which one party has given a security deposit on a contract and the other party has not fulfilled its duty.
Replevin rules apply to specific commercial claims in which real property, and not the monetary value of property, must be transferred in a dispute. In this example, replevin would be ordered instead of a transfer of money if the plaintiff meets the burden of proof.
Assuming a legal contract is in place, factors determining replevin include:
- The goods must be unique, otherwise monetary compensation will apply. In the case of real estate transactions, the exact property is completely unique and the contract and price apply only to that specific property. Replevin would apply.
- Other terms and conditions may also apply in addition to replevin. These include payments for damages or other obligations on behalf of the plaintiff or defendant.
- The defendant, through arbitration or otherwise, has made attempts to reclaim what was lost or encourage the other party to fulfill its contractual obligation.
Specific Performance Examples for Unique Items
Replevin also refers to non-real estate commercial transactions. For instance, if a buyer purchases a famous art sculpture at auction, and does not receive the sculpture, the buyer may not be made whole by the return of his money, because there is only one such sculpture in the world for him to buy. Therefore a civil court may order the auction house to provide him with his sculpture or face penalty.
Repossession cases also invoke replevin, but in a different way. In cases where the buyer is in default of their purchase contract, the plaintiff has the right to repossess. However, that does not extend to cases where injury or breach of peace would be at stake. So if a mother defaults on a car loan payment, but will lose child support if a creditor shows up to repossess the vehicle, the creditor may seek specific performance ordering her to return the vehicle on her own.
Specific Performance Examples in the Workplace
Requiring someone to perform work as part of a contract is prohibited by the 13th Amendment in the United States, which bars involuntary servitude. Personal property, service contracts, and signed employer-employee agreements are generally exempt from specific performance. That said, if a plaintiff enters a contract fairly, with 'clean hands', an injunction may be issued to bar the defendant from performing the service at question for a specified length of time.
The Charles Flowers case is a classic example of the 'clean hands' rule. Flowers was drafted by two professional football teams, and signed with the New York Giants in 1959. The Giants conspired to keep the draft a secret so that Flowers could play in the college Sugar Bowl in 1960, which was against the rules of college football. Flowers then attempted to withdraw from the contract with the Giants and sign with another team, the Los Angeles Chargers, and returned the money to the Giants.
When the Giants tried to sue Flowers for specific performance, since he was a unique asset and had made an agreement, the fact that the professional team tried to get around college league rules meant they did not have clean hands. Therefore specific performance was denied by the court.
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