Specific Performance In Property & Contract Law: When Courts Force A Deal To Proceed
- 22 hours ago
- 4 min read
When a contract is breached, compensation is not always enough. In some cases, particularly in property transactions, the law allows a court to order a party to enforce the contract, rather than simply paying damages. This remedy is known as specific performance.
Understanding when specific performance applies, and when it does not, is critical if you are involved in a property or contractual dispute.
In This Article:
What Is Specific Performance?
Specific performance is an equitable remedy available under Queensland contract law. Rather than awarding financial compensation for a breach, the court orders the breaching party to perform their contractual obligations as agreed.
In practical terms, this may mean:
Ordering a buyer to complete the purchase of a property; or
Ordering a seller to transfer title and complete the sale.
Specific performance is most commonly sought in conveyancing and property disputes, where the subject matter of the contract is considered unique and cannot easily be replaced.
How Does Specific Performance Apply To Property Transactions?
Property is treated differently to many other contractual goods because no two parcels of land are identical. For that reason, courts often accept that money alone may not adequately compensate a party who loses the benefit of a property contract.
Examples include:
A buyer attempts to terminate a contract without valid grounds. The seller may apply for specific performance to compel the buyer to settle.
A seller refuses to complete settlement. The buyer may seek an order forcing completion of the sale.
In many cases, the mere threat of seeking specific performance is enough to bring the other party back to the table. When it is not, court intervention may be necessary.
Is Specific Performance Automatically Granted?
No.
Specific performance is a discretionary remedy, meaning the court is not obliged to grant it, even where a contract has clearly been breached.
Courts will consider a range of factors, including:
whether there is a valid and enforceable contract
whether the party seeking the order has complied with their own obligations
whether monetary damages would be an adequate remedy
whether enforcing the contract would cause unfair or unconscionable hardship to the other party
whether the contract requires ongoing personal cooperation between the parties
Breach of Contract And Available Remedies
A valid contract is legally binding and enforceable through the courts. If a party fails to meet their obligations, a breach of contract occurs.
Where a breach causes loss, the non-breaching party may seek one or more remedies, including:
monetary damages
specific performance
an injunction
An injunction may be used on an interim basis to preserve a party’s position while seeking final relief, including specific performance.
When Will A Court Award Specific Performance?
Courts most commonly award damages for breach of contract. However, damages may be inadequate where the subject matter of the contract is unique or irreplaceable.
Specific performance is more likely to be ordered in contracts involving:
Real estate
Unique personal property (e.g. custom-made goods, scarce items, or works of art)
The guiding principle is to place the injured party in the position they reasonably expected to be in if the contract had been performed.
What Must Be Proven To Obtain Specific Performance?
To succeed in an application for specific performance, the party seeking the order (the Plaintiff) must establish that:
a binding contract existed; and
the other party (the Defendant) breached the contract.
Elements of a Valid Contract
A court will only enforce a contract if it includes:
agreement (offer and acceptance);
consideration (something of value exchanged); and
intention to create legal relations.
Without these elements, specific performance will not be available.
Types of Breach
A breach may be:
actual, where a party outright refuses to perform
anticipatory, where a party indicates they will not perform or becomes unable to do so
Once a breach is established, the court then considers whether specific performance is appropriate in the circumstances.
Alternatives If Specific Performance Is Refused
If a court declines to order specific performance, other remedies may still be available, including:
Nominal Damages
A small monetary award recognising that a breach occurred, even if no substantial loss is proven.
Expectation Damages
Compensation intended to place the injured party in the position they would have been in had the contract been performed.
Liquidated Damages
Where the contract includes a pre-agreed damages clause setting out compensation payable in the event of breach.
Defences To Breach Of Contract Claims
If you are defending a breach of contract claim, you may have grounds to:
avoid liability altogether; or
limit your liability.
Potential defences include:
contractual limitation clauses
factors rendering the contract invalid
frustration or force majeure (where properly provided for in the contract)
The availability of defences depends heavily on the contract wording and the surrounding circumstances.
Get Advice Before Taking Action
Specific performance is a powerful but complex remedy. Whether you are seeking to enforce a contract or defending a claim, early legal advice can significantly improve your position.
Our experienced litigation and property lawyers regularly advise on contract disputes, property transactions and enforcement options. We can review your contract, assess the breach, and guide you through the most effective strategy to protect your rights.
If you need advice about specific performance or a contract dispute, contact our passionate team today for practical and tailored legal guidance.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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