SPECIFIC PERFORMANCE “EQUITABLE” REMEDY - Contracts Flashcards
SPECIFIC PERFORMANCE
“EQUITABLE” REMEDY
Definition:
Defendant is required to perform the contract.
THE SPECIFIC PERFORMANCE
5-PART CHECKLIST
- CONTRACT IS VALID/ CERTAIN & DEFINITE
- CONTRACT CONDITIONS OF PLAINTIFF MUST BE SATISFIED
- INADEQUATE LEGAL REMEDY ALTERNATIVE
- FEASIBILITY OF ENFORCEMENT
- DEFENSES
THE 2 FAVORITE BAR EXAM “CONDITIONS” FACT PATTERNS
Bar Exam Tip: Both fact patterns typically involve land sale contracts.
- DEFICIENCIES FACT PATTERN
- TIME OF THE ESSENCE CLAUSE FACT PATTERN
DEFICIENCIES FACT PATTERN
Seller cannot deliver the agreed upon consideration.
(Usually involves the quantity of land.)
DEFICIENCIES FACT PATTERN Threshold Inquiry:
Who is the plaintiff? Is it the seller or the buyer?
SELLER as Plaintiff in Deficiency Fact Pattern
(i) Can specifically enforce the contract if the defect is minor.
(ii) Cannot, however, enforce the contract if the defect is major.
- unless: The seller can cure the defect by closing.
Buyer as Plaintiff in Deficiency Fact Pattern
(i) Can enforce the contract even if the defect is major.
(ii) Cannot, however, enforce the contract if the defect is very major.
Bar Exam “Imperative”: If you decide that specific performance should be granted under the rules above even though a defect still remains, you must include a sentence noting that the court will lower the purchase price to take into account this defect in consideration.
- this is called abatement
TIME OF THE ESSENCE CLAUSE
Buyer does not meet contract condition of timely performance.
Trigger for time of essense clause
Time of Essense clause included with forefiture provision.
Buyer will have made a late payment.
This triggers the time of the essence clause and its forfeiture provision.
Seller wants to keep both the land and any performance rendered to date.
Buyer will bring a lawsuit for specific performance.
Equitable Maxim:
Equity abhors forefiture
What Factors Court Can Look at to Avoid the Harsh Result of a Forfeiture?
(1) Loss to seller is small.
(2) Tardiness is de minimis.
(3) Waiver (seller has accepted late payments in past).
(4) Buyer would suffer undue hardship.
INADEQUATE LEGAL REMEDY ALTERNATIVE
What Is The Basic Alternative?
Money Damage
THE FAVORITE BAR EXAM ISSUE: THE “UNIQUENESS” PROBLEM
The Concept: If the property is “unique,” then even if plaintiff received money damages, he could not simply go out and buy it. It would not be available.
Threshold Inquiry:
Determine whether contract was for the sale of real or personal property.
Real Property and Uniqueness
All land is unique even if all is identical
PERSONAL PROPERTY
General Rule:
Not unique and thus damages adequate
Exceptions to the PERSONAL PROPERTY General Rule:
(1) One of a Kind or Very Rare
(2) Personal Significance to Buyer
(3) Circumstances Make Chattel Unique
BAR EXAM FAVORITE ISSUE
LIQUIDATED DAMAGES CLAUSES General Rule:
A liquidated damages clause does not make money damages adequate. Specific performance is still available.
Exceptions to the LIQUIDATED DAMAGES CLAUSES General Rule:
Where the clause provides that this is to be the “only remedy”
FEASIBILITY OF ENFORCEMENT
PERSONAL SERVICES CONTRACT ENFORCEABILITY
RULE:
They are not specifically enforceable.
Reasons:
(1) Enforcement Problem
(2) Involuntary Servitude
FEASIBILITY OF ENFORCEMENT
COVENANTS NOT TO COMPETE RULE:
These are enforceable if a 2-part test is met:
(1) The services are unique, and
(2) The scope (geographic & duration) is reasonable
DEFENSES
EQUITABLE DEFENSES
1) UNCLEAN HANDS
2) LACHES
3) UNCONSCIONABILITY
CONTRACT DEFENSES
1) MISTAKE
2) MISREPRESENTATION
3) STATUTE OF FRAUDS
BAR EXAM FAVORITE:
STATUTE OF FRAUDS/PART PERFORMANCE DOCTRINE PROBLEM
How Do You Spot The Problem?
(i) The contract must involve land. It could be either a land sale contract or one to make a testamentary disposition of land.
(ii) This contract will have been an oral contract.
Defendant now raises the Statute of Frauds as a defense to specific performance.
Once you have spotted and set out the problem for Statute of Frauds, discuss the Rule.
If one has rendered
(i) valuable part performance,
(ii) in reliance on the contract, this will take the case out of the Statute of Frauds and specific performance will be
granted.
