Chapter 8-3 Specific Performance

• Jurisdiction: United States

8-3 Specific Performance

8-3:1 Overview

Specific performance is an equitable remedy used as a substitute for monetary damages that compels a party who has failed or refused to perform a valid contractual obligation to fulfill that obligation by performing the contract.⁶¹ To obtain specific performance, there must be a valid and enforceable agreement between the parties. A plaintiff must establish that the contract sought to be enforced is valid and complete, and that it possesses the essentials of a binding legal obligation.

8-3:1.1 Related Causes of Action

Breach of Contract, Assumpsit, Declaratory Judgment, Suit for Rescission, Common Law Fraud, Statutory Fraud, Fraud by Non-disclosure, Constructive Fraud, Fraudulent Concealment, Breach of Covenant not to Compete

MUST READ CASES

DiGiuseppe v. Lawler, 269 S.W.3d 588 (Tex. 2008)

Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530 (Tex. App.—Dallas 2007)

8-3:2 Elements

(1) The existence of a valid and binding contract

• There must be an enforceable contract to be performed for a party to seek specific performance.⁶²
• The contract must have precise terms capable of enforcement.⁶³ The essential terms of the contract must be clear and certain enough to be understood without recourse to parol evidence.⁶⁴
• However, small ambiguities will not preclude a decree for specific performance if they can be made clear with extrinsic evidence.⁶⁵
• The contract must contain all of the material terms to be enforced.⁶⁶ The absence of some terms will not preclude specific performance if those terms were non-essential.⁶⁷
• The contract does not need to be in writing unless the statute of frauds requires it to be written.⁶⁸

(2) The plaintiff has performed all obligations imposed by the contract or is ready, willing, and able to perform

• A party must show that it has satisfied its obligations under the contract to be entitled to specific performance.⁶⁹
• The party seeking specific performance must demonstrate its own readiness, willingness, and ability to perform its obligations under the contract.⁷⁰
• A plaintiff seeking specific performance must actually tender performance as a prerequisite to obtaining specific performance.⁷¹
• When a defendant refuses to perform or repudiates a contract, the plaintiff may be excused from actually tendering performance before filing suit for specific performance.⁷²

• The general rule requiring actual tender is relaxed, based on equitable considerations, when tender would be a useless act.⁷³

• In 2019, the Texas Supreme Court stated that a party seeking the equitable remedy of specific performance in lieu of money damages may, in some circumstances, be excused from pleading and proving that the plaintiff performed or tendered performance as contractually required, but must additionally plead and prove that, at all relevant times, it was ready, willing, and able to perform under the contract.⁷⁴ The Court did not elaborate, however, regarding the circumstances in which pleading and proof of performance or tender would be excused.

(3) The plaintiff has no adequate remedy at law

• The plaintiff must have no adequate remedy at law.⁷⁵
• If the subject matter of the contract is the conveyance of real property, specific performance is more readily available as a remedy for the sale of real estate than for the sale of personal property, because damages are generally believed to be inadequate in connection with real property.⁷⁶
• If the subject matter of the contract is the sale of personal property, specific performance may be available if the personal property has a "special, peculiar, or unique value or character."⁷⁷
• If the subject matter of the contract is the performance of services, courts will not grant specific performance because there is no mutuality of remedy.⁷⁸ However, courts are more likely to grant specific performance when the contract requires a party to refrain from doing something.⁷⁹

(4) Equitable principles support the decree of specific performance

• specific performance will not be granted if the court deems the remedy inequitable under the circumstances.⁸⁰
• Factors which a court may consider in determining whether to award specific performance include, but are not limited to:

• The hardship such a decree would place on the parties;⁸¹
• Whether long-continued supervision by the court will be required;⁸²
• Whether complete relief can be rendered by the remedy sought;⁸³ and
• If the remedy sought is granted it can be adequately enforced.⁸⁴

• Although mere hardship to the defendant does not preclude a decree for specific performance, excessive hardship might.⁸⁵ The impossibility of a defendant being able to perform precludes specific performance.⁸⁶
• Courts will refuse to grant specific performance if:

• The contract term is illegal;⁸⁷
• The contract was obtained through fraud, duress or coercion;⁸⁸ or
• The contract was formed based upon a mutual mistake which precluded a meeting of the minds.⁸⁹

8-3:3 Damages and Remedies

8-3:3.1 Decree of Specific Performance

A court will issue a decree compelling the defendant to perform.⁹⁰

The decree must specifically detail those things which the defendant must do.⁹¹

The decree must be in conformity with the terms of the agreement made by the parties.⁹²

Courts are reluctant to issue decrees in which they maintain ongoing supervision.⁹³

8-3:4 Defenses

8-3:4.1 Statute of Limitations

The applicable limitations period is four years.⁹⁴

The cause of action accrues immediately when there is a failure to perform the agreement.⁹⁵

8-3:4.2 Laches

Laches is an available affirmative defense.⁹⁶

8-3:4.3 Contractual Defenses

If the defendant may avoid the obligation on the underlying contract, the plaintiff may not obtain an order requiring specific...