Specific Performance
What is specific performance?
A court order requiring a party to perform their contractual obligation, used when damages are inadequate.
What are liquidated damages?
Pre-agreed damages written into the contract to compensate for future breach.
What is mutual mistake?
A mistake made by both parties about a basic assumption that materially affects performance.
What is impracticability?
A supervening event makes performance extremely difficult or expensive, and the party did not assume the risk.
What is frustration of purpose?
A supervening event that destroys a party’s principal purpose in entering the contract.
When is specific performance typically available?
In contracts involving real estate, unique goods, or when cover is impossible.
When are liquidated damages enforceable?
When they reflect a reasonable estimate of anticipated loss and are not a penalty.
What is the effect of mutual mistake?
The contract is voidable by the adversely affected party if they did not bear the risk.
What are examples of events that can cause impracticability?
Natural disasters, government bans, wars, or extreme supply chain breakdowns.
What are the elements of frustration of purpose?
The purpose must be substantially frustrated, the event unforeseen, and the risk not assumed by the party.
When is specific performance not available?
For personal services, uncertain terms, or when enforcement would be burdensome or unfair.
What makes a liquidated damages clause unenforceable?
If it is a penalty — i.e., grossly disproportionate to the expected harm.
What is unilateral mistake?
A mistake by one party that may excuse them if enforcement would be unconscionable or the other party knew or caused it.
Is increased cost alone sufficient for impracticability?
No — unless it results from an unforeseen extreme event.
How does frustration differ from impracticability?
Impracticability makes performance too hard; frustration makes performance pointless.
What is the standard for granting specific performance?
The requesting party must show that legal remedies are inadequate and performance is feasible.
When must reasonableness of a liquidated damages clause be assessed?
At the time of contracting, not after the breach.
When does a party bear the risk of mistake?
If the risk is allocated by agreement, the party is consciously ignorant, or it’s reasonable to assign the risk to them.
Can a party be excused for impracticability if they caused the event?
No — the event must be unforeseeable and not caused by the party seeking excuse.
Must both parties share the same purpose for frustration to apply?
No — only the affected party’s principal purpose must be frustrated.
How does specific performance interact with liquidated damages clauses?
If liquidated damages are adequate, courts are less likely to grant specific performance.
Can a party seek both liquidated damages and actual damages?
No — liquidated damages are usually exclusive unless the contract says otherwise.
What is a scrivener’s error and what is the remedy?
A mistake in recording the contract — the remedy is reformation, not rescission.
What does the UCC require for impracticability in the sale of goods?
A showing that performance has become impracticable due to a contingency not foreseen at the time of contracting.
Is frustration available when the party’s purpose was personal and unknown to the other side?
No — the purpose must be known or reasonably understood by both parties.