Specific performance

     The usual common law remedy for breach of contract is compensatory damages, i.e. money that the breaching party must pay the aggrieved party to compensate the aggrieved party for the loss attributable to the breach.   See Commentary.Compensatory damages.  In addition to damages for breach of contract, an uncured material failure of performance will typically discharge the aggrieved party from any performance it otherwise would still be obligated to perform, as we see in  Commentary.Failures of performance that discharge duties of counter-performance.

     Here we consider what might seem to be a more obvious remedy for breach of contract, a court order that the breaching party perform its contractual obligations, a remedy known as "specific performance."  Such a remedy would usually give the aggrieved party close to what the contract led her to expect (unless the breaching party risks contempt of court by refusing to obey the court's order).  As such, the remedy suggests that promise keeping is a moral imperative, that is, promises invoke trust and it is therefore morally appropriate to keep one's promise or be forced to keep the promise.  Indeed, civil law countries, such as those in Continental Europe, Central and South America, much of Asia and Africa, and Louisiana, permit parties aggrieved by breach of contract to seek a court order of specific performance, although some empirical research suggests that the remedy is rarely sought in civil law countries.  Whether in a civil law or common law system, an order of specific performance cannot, of course, make the performance timely, unless in response to a suit for anticipatory repudiation brought prior to the breach, nor can it make the aggrieved party economically whole unless accompanied by monetary compensation for the lost time value of money and for the costs of litigation (most notably attorney's fees).  It is also not likely to repair the torn fabric of trust or erase psychological scars. 

     Courts in common law systems, such as in the United States and the United Kingdom, may order specific performance of a contract, but only in limited types of cases.  Much of the reason is historical.  Indulge a truncated historical foray.   Following the Norman conquest of England, two court systems emerged and evolved.  The royal courts, established under the authority of the king, developed a system a justice in civil cases relying upon "forms of action."   Each form of action addressed a specific wrong and a litigant initiated a form of action by the specific "writ" associated with the form of action.  Specific procedures, substantive law, and remedies evolved for each form of action.  A litigant was entitled only to those remedies permitted by the particular form of action.   Money damages was the remedy that evolved in connection with the several writs ("debt," "covenant," "trespass-on-the-case," "indebitatus assumpsit," "special assumpsit," "general assumpsit") that came to be used for what we now call an action for breach of contract.  The royal courts eventually supplanted indigenous local courts (feudal courts, mercantile courts in markets and towns, and other local courts) that antedated the Norman conquest. 

     During the thirteenth and fourteenth centuries a second court, the "Chancery Court," also known as the "Equity Court," emerged in response to petitions by citizens to the Chancellor for relief that could not be obtained either in the local courts or within the rigid strictures of the forms of action in the royal courts.  In response to such petitions, the Chancellor might order equitable relief, that is, relief that could not otherwise be obtained through the local or royal courts.  In what we would now call actions for breach of contract, for which the remedy in the royal courts was only money damages, the Chancellor might order specific performance of the contract.  Notwithstanding the 19th century merger in the United States of law courts and equity courts into a unified court, and the adoption of unified systems of pleading causes of action, state and federal courts continue to adhere to traditional rules distinguishing between relief available "at law" and relief available "in equity."   Among those rules is the rule that a court will order specific performance of a contract (an equitable remedy) only where money damages (the remedy at law) is inadequate.  For an excellent, more thorough, yet still relatively brief historical survey of the development of the royal courts, the forms of action, the equity courts, and the merger of law and equity, see R.Casad, H.Fink, & P.Simon, Civil Procedure: Cases and Materials 399-425 (2d Ed. Michie), from which the preceding summary was derived.  Familiarity with this history is an important part of your legal education. 

     As a matter of common law, courts consider money damages an inadequate remedy for breach of contract only in limited types of cases.  Chief among them are actions by a purchaser for breach by the seller of a contract for the sale of real property, because real property is deemed unique and its loss not compensable in money damages, and actions by a purchaser for breach by the seller of a contract for the sale of unique goods, such as a work of art (U.C.C. 2-716) (see Hoffman v. Boone for an example).  Note also that in some circumstances a seller of goods is entitled to the price where the buyer has failed to pay (a form of specific performance) (UCC 2-709). 

     Even where damages are an inadequate remedy, equity has traditionally refused to order specific performance in some types of cases.   For example, courts will typically not order specific performance of construction contracts or employment contracts because of concerns about the difficulty of framing and enforcing orders.  However, in cases involving athletes or artists with unique or extraordinary ability, courts may issue an order against the athlete or artist enjoining that person from performing elsewhere.  Some of our most famous athletes, including Julius ("Dr. J") Erving (basketball, 1970's and 1980's) and Rick Barry (basketball, 1960's and 1970's) have been subject to such an injunction.  Smith, Waters, Kuehn, Burnett & Hughes, Ltd. v. Burnett considers whether an attorney fits the same bill.   

     Because civil law systems sanction the remedy of specific performance more broadly than do common law systems, the drafters of the Convention on the International Sale of Goods faced the difficult problem of reconciling the different approaches of the two systems (because one party's place of business might be located in a country using a common law system and the other party might be located in a country using a civil law system).  The CISG adopted a compromise, authorizing the remedy in a variety of circumstances but also providing that "a court is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention."  See CISG Articles 46, 28.  The problems posed by this compromise are identified and explored in J. Fitzgerald, CISG, Specific Performance, and the Civil Law of Louisiana and Quebec, 16 J. Law & Commerce 291-313 (1997).