What is Specific Performance?
Often, when considering the possibility of litigation, clients will focus on the remedy of monetary damages to compensate them after suffering a legal injury. However, sometimes, a litigant may find that monetary damages simply cannot accomplish enough – sometimes, a liable party who should have taken some action, must actually take that action in order to make the aggrieved party whole.
Depending on the case, a party may bring a cause of action for specific performance, which relies upon the courts’ equitable powers to legally compel another party to act. Specific performance most often comes up in cases involving transactions, and perhaps most prevalently, real estate transactions involving a buyer and seller of real property. In such cases, and under the appropriate circumstances, a court may enforce the performance of a contract where the defaulting party has refused to perform.
Specific performance in business and real estate transactions rests upon the theory that recovery of monetary damages will not sufficiently compensate the aggrieved party for the defaulting party’s breach. Underlying this reasoning is the notion that the transaction – again, most often real estate – involves the conveyance of something so unique that the claimant cannot find the same thing elsewhere. As a result, money is not enough. The claimant wants the completion of the actual bargain.
Specific performance requires clear, cogent, and convincing evidence, an admittedly high standard, of the claimant’s right to the relief requested and of the defaulting party’s breach of the underlying contract. Moreover, the party seeking relief must have performed all required obligations under the contract (except to the extent the other party prevents said performance) and be ready, willing, and able to complete the transaction. In other words, the defendant must have sole responsibility for the transaction not going through.
A recent court case in Washington State, Steigman v. Hutchison, confirmed the general principle that Washington State courts have broad discretionary authority to fashion equitable relief, including specific performance. In the case, Steigman had complied with the terms of a contract to purchase real estate, including timely obtaining financing, but Hutchison tried to back out of the deal, arguing that his wife (who had subsequently passed away) never agreed to the price. However, Hutchison failed to assign error to the finding by the trial court that his marital community entered into the contract, and thus both he and his wife had effectively agreed. Moreover, the court of appeals affirmed the trial court’s finding that Steigman had timely obtained financing without any objection from the Hutchisons. The court of appeals upheld the trial court’s order of specific performance for Hutchison to complete the sale.
Interestingly, Hutchison also tried to argue that because the litigants tried all claims in front of a jury, and because the jury rendered verdicts on all causes of action, that the trial court had no independent authority to enter findings of fact and conclusions of law. The court of appeals disagreed. The court reasoned that a jury trial decision in favor of specific performance did not preclude the trial court issuing findings of fact and conclusions of law regarding specific performance or enforcing specific performance as a remedy. The court of appeals went on to affirm that the trial court had discretion to order specific performance of the real estate contract as an additional remedy beyond the decisions reached by the jury.
Specific performance can serve as a powerful remedy in certain cases where monetary damages do not suffice. The lawyers at Beresford Booth have significant experience in litigating real estate matters, including real estate transactions, and cases involving specific performance. If you face any real estate issues and need assistance, please do not hesitate to contact us.
To learn more about What is Specific Performance?, please do not hesitate to contact us at info@beresfordlaw.com or by phone (425) 776-4100.
