Joseph G. Ballstaedt
801.365.1021
joe@snjlegal.com
After a party breaches a contact and fails to perform the contract terms, you might be able to force him to perform through what is known as “specific performance.” This doctrine usually comes up when a party agrees to sell real estate but then backs out. Real estate is a unique, one-of-a-kind asset that a potential buyer can’t find anywhere else. So, if the seller gets cold feet after signing a contract, a court may consider it fair and proper to force the seller to honor the deal and convey the property.
Specific performance can also apply to contracts that involve property other than real estate. Whether a Utah court will order specific performance of a contract depends on certain factors, a few of which are discussed below.
Specific Performance is About Fairness
Specific performance is an equitable remedy for breach of contract claims. An equitable remedy is a tool that a Utah judge can use if he or she believes that doing so will achieve a fair outcome. Utah courts have explained that specific performance is governed by the “sense of justice and good conscience of the court,” so the judge has significant discretion in determining whether this remedy should be granted. It will all depend on the judge and the unique facts and circumstances of the case.
Because specific performance is about fairness, a judge usually won’t allow a party with unclean or tainted hands to benefit from specific performance. A party’s cry for specific performance will be hollow if it has engaged in any concealment, overreaching, misleading, fraudulent, or improper behavior in connection with the contract. Fairness generally will not be rewarded to those who act unfairly. Also, if the party hasn’t properly and fairly fulfilled its end of contract, specific performance probably isn’t an option.
A Clear Contract is Required
Specific performance is only available if the two parties’ intent and understanding regarding the essential and material terms of the contract is clear. This is because specific performance asks a judge to come in and force somebody—by a powerful judicial order from a Utah court—to take certain action that fixes his or her breach of contract. If it isn’t even clear what action was required in the parties’ contract, a judge isn’t going to get involved. Judges don’t want to mistakenly force people to do things they did not clearly agree to do.
Must Involve Unique or Special Property
Under Utah law, specific performance is generally only available if the contract involves property that is unique or possesses special value. Land is assumed to possess this necessary uniqueness, but just because a contract involves land does not mean specific performance is necessarily available. Additional factors must be met.
Other property that is unique or possesses a special value might be a one-of-a-kind painting, a vintage or custom car, a rare antique, or some other property that cannot be purchased anywhere else. Property that probably doesn’t qualify for specific performance includes things such as typical cars (like a Honda Accord), electronics, building materials, heavy equipment, or any other items that you can buy from a variety of locations. If a party breaches a contract with respect to these types of products, the non-breaching party can buy the lost items elsewhere and then sue the breaching party for damages.
Also, the contract almost certainly must involve property, not a contract for personal services or employment. If a musician breaches a contract to perform a personal service, like singing at a wedding, it would be very impractical to compel the singer to perform against his will. The performance would be terrible. Similarly, you can imagine the problems associated with trying to force an employee to finish an employment contract or forcing a general contractor to finish building a house. It sounds like involuntary servitude, and the work product would likely be terrible. A person who breaches a personal services contract can be liable for other contract damages and remedies, but specific performance is off the table.
Will Specific Performance Apply?
Now that we’ve discussed a few principles on specific performance, let’s address a few possible scenarios. Let’s suppose that a few sellers agree to the following contracts but then get cold feet:
- A business owner agrees to sell his business to a competitor but then decides he wants to keep running his business.
- A car owner agrees to sell his Honda Accord, but later decides to keep it as a backup vehicle.
- An art collector sings a contract to sell a valuable and unique piece of art but then decides to keep the art in his permanent collection.
- A famous photographer signs a contract to document pictures on a high-profile outdoor expedition but later finds a more desirable job during that time.
When these people back out, can any of the buyers force the breaching parties to perform their obligations? As discussed above, if the contract is for unique or special property (and not services) and forcing the sale would be fair under the circumstances, specific performance may be available. So, specific performance for a Honda Accord or a photographer’s services likely aren’t available, but it may be an option for a contract for a unique piece of art and, depending on the circumstances, perhaps the sale of a business. Again, each case is unique and will be governing by what the judge deems to be fair.
Help with Specific Performance Issues
If you are involved in a breach of contract where the other party isn’t performing, and you are considering seeking specific performance, such as in a real estate transaction, I am happy to help. Conversely, if a party is threatening to seek specific performance against you, I can advise you of potential outcomes and your contract rights. I offer a free consultation. My direct dial is 801-365-1021, and you can e-mail me at joe@snjlegal.com.
