Certain contracts have clauses which allow one party to require the other party to meet an obligation. Specific performance of an obligation can be requested. Specific performance is a court order that requires a party to perform an obligation found in a contract that the defendant has failed to fulfill. Because no two pieces or parcels of land are exactly alike, each scenario is unique and individualistic in nature. Certain scenarios require special attention and not every two cases have the same legal outcome.
Specific performance occurs only in instances where a lawsuit is initiated by the damaged party. This process is complex and does not have a definitive resolution as, once again, each case is different. Because of the time-consuming and expensive process of a specific performance, most homeowners do not pursue this route.
Most buyers and sellers involved in residential real estate typically do not have the time nor the resources or reason to be involved in such an arduous process, particularly one where said party is required to wait to obtain a court date, court approval, etc. An alternative to specific performance would be a standard lawsuit where the damaged takes the defendant to court to recover for monetary damages.
Specific performance is a legal direction that requires a violator of an agreement or contract to perform a specific action that he or she had been obligated to perform. Courts typically enforce specific performance if the violating party (or defendant) has the capacity to perform the obligated action and/or financial damages are deemed inadequate to resolve the dispute.
Not all violated parties (or plaintiffs) can request specific performance against a defendant. Specific performance can only be claimed when there is legally-binding contract with definitive terms and consideration (i.e. compensation), and when there is a lack of appropriate, alternative legal remedies.
Case Law Relating to Specific Performance
Case Review: Behniwal v. Mix (2005)
In Behniwal v. Mix (2005) 133 Cal.4th 1027., a real estate buyer, Behniwal, brought legal suit against a seller, Mix, for specific performance and declaratory relief.
Mix’s family residence was for sale. Mix’s real estate agent allegedly signed Mix’s name on a counteroffer to a buyer (Behniwal) without Mix’s permission. This led Behniwal to believe a sale would occur. Shortly thereafter, Mix provided Behniwal with all of the necessary closing documents, including: a disclosure statement, natural hazards disclosures, agent’s disclosure, compliance statements, and water and heater compliance results.
Despite all appearances of a sales contract being in place, Mix ultimately decided to no longer sell his property. Behniwal filed suit against Mix for specific performance and declaratory relief.
The Superior Court ruled in favor of Mix. Behniwal appealed and the Court of Appeals reversed the lower court’s decision. It granted Behniwal’s request for specific performance. This required Mix to sell his house. It further ruled that the real estate agent was liable to pay damages to Behniwal.
Case Review: Huijers v. DeMarrais (1993)
The case, Huijers v. DeMarrais (1993) 11 Cal.4th 676., involved a buyer and a dual agent who failed to disclose his dual agency with a seller.
The plaintiff, Huijers, filed a lawsuit against his real estate agent (DeMarrais) for the agent’s failure to provide a disclosure statement regarding his dual agency prior to them signing a contract. Huijers argued that DeMarrais was not entitled to his commission on this basis, and sought specific performance for the purchase agreement and damages.
Initially, the trial court ruled in favor of DeMarrais. However, it reversed its decision on Huijers’ appeal on the basis that a disclosure statement was not provided by DeMarrais prior to establishing the listing agreement. Consequently, it rules that DeMarrais was not entitled to commission on the transaction.
Case Review: Realmuto v. Gagnard (2003)
In the case, Realmuto v. Gagnard (2003) 110 Cal.4th 193., a seller sued real estate investors for specific performance and breach of contract.
Real estate investors (represented by Gagnard) entered into a purchase contract with the seller of a residential property in Alpine, California (Realmuto). The investors’ goal was to assign the contract with the intent of another party purchasing it- the Cuyapaipe Band of Mission Indians. However, the Mission Indians ultimately chose not to purchase the property. When Gagnard told Realmuto that they would not be buying his property, Realmuto sued.
In Superior Court, Realmuto contended that Gagnard violated the purchase contract and thus, owed specific performance. In this case, he was arguing that Gagnard had to purchase the property. However, Gagnard contended that Realmuto had also violated the contract, as he had never provided Gagnard with the required TDS inspection. He also pointed out that paragraph 6 of the purchase agreement had not been signed or initialed by Realmuto. Realmuto responded by saying that Gagnard never requested the disclosure statement in question. The Superior Court ruled a summary judgment in favor of Gagnard and the investors.
Realmuto appealed. The Court of Appeals affirmed the lower court’s ruling, maintaining that Realmuto was not entitled to specific performance.
When Will a Court Impose Specific Performance?
A court will impose specific performance in the case of :
1. Viable and obligatory contract
2. Specific and certain terms
3. Mutuality of obligation and remedy
4. Absence of remedy at law
5. Independence of fraud and overreaching
Nearly all of the 50 states have embraced the Uniform Commercial Code which is in direct relation to specific performance. Courts themselves will only order specific performance if the contract that is under review is deemed as fair and just. The courts play a large part in the order of specific performance as they oversee the contract and its obligations that a party will perform.
A plaintiff in the eyes of the court must be ready and willing to abide by any obligatory actions that a court has imposed upon them. If the individual has either completed, offered to complete, or is willing to complete any deeds that meet the terms of the contract this will then be considered grounds to grant specific performance.
