Performance Flashcards
(2 cards)
Substantial Performance
Substantial performance is a legal principle in contract law that allows a party to fulfill their contractual obligations even if there are minor deviations from the terms specified in the contract.
The key idea is that the performance is close enough to what was agreed upon that the contract’s overall purpose is achieved.
Key Points
Sufficient Fulfillment: The performance must be sufficient to meet the essential purpose of the contract.
Minor Deviations: Only minor deviations from the contract terms are allowed; significant deviations may constitute a breach of contract.
Example: In the case of Jacob & Youngs v. Kent, the contractor used a different type of pipe than specified in the contract. The court ruled that the contractor had substantially performed because the difference in pipe did not significantly affect the overall purpose of the construction.
Substantial performance ensures that parties are not unfairly penalized for minor mistakes or variations, as long as the main objectives of the contract are met.
Other Uses of Substantial Performance
Recovery of Payment: A party who has substantially performed their contractual obligations can seek payment for the work completed, even if there are minor deviations from the contract terms.
Mitigation of Damages: It can help mitigate damages by demonstrating that the essential purpose of the contract was fulfilled, reducing the amount of compensation owed for minor breaches.
Evaluation of Performance: Courts use the doctrine to evaluate whether a party’s performance meets the standard required by the contract, ensuring fairness in contractual relationships1.
Example
Construction Contracts: If a contractor builds a house but uses slightly different materials than specified, they can still recover payment if the house meets the overall specifications and purpose.
Substantial performance ensures that parties are not unfairly penalized for minor deviations, promoting fairness and practicality in contract enforcement.
Specific Performance
Specific performance in contract law is an equitable remedy where a court orders a breaching party to fulfill their obligations under a valid contract, rather than simply paying monetary damages to the non-breaching party. It’s a remedy compelled by the court when monetary damages are considered inadequate to compensate the injured party.
Think of it this way: instead of the court saying, “You broke the contract, so you owe the other party money,” the court says, “You promised to do something, and you must do it.”
Key Characteristics:
Equitable Remedy: Unlike monetary damages, which are a legal remedy available as a matter of right in many breach of contract cases, specific performance is an equitable remedy. This means it’s granted at the discretion of the court based on principles of fairness and justice.
Inadequacy of Monetary Damages: Courts typically order specific performance only when monetary damages would not adequately compensate the non-breaching party for their loss. This often occurs when the subject matter of the contract is unique or rare.
Enforcement of the Contract’s Terms: The goal of specific performance is to ensure that the non-breaching party receives exactly what they bargained for in the contract.
Common Situations Where Specific Performance Might Be Ordered:
Real Estate: Because each piece of land is considered unique, courts frequently order sellers to specifically perform their obligation to transfer property to a buyer who has met their contractual duties. Monetary damages might not allow the buyer to obtain a comparable property.
Unique Goods: If a contract involves the sale of rare artwork, antiques, custom-made items, or goods in short supply with no readily available substitutes, a court might order the seller to deliver the specific goods.
Contracts for Services (Less Common): Courts are generally reluctant to order specific performance for personal service contracts (e.g., an employment agreement) because it’s difficult to force someone to perform a service against their will.
However, in unique situations, an injunction (a type of specific performance that prohibits an action) might be used to prevent someone from offering their unique services to another party in violation of a contract.
Requirements for Obtaining Specific Performance:
While the exact requirements can vary slightly by jurisdiction, some common elements a plaintiff must typically demonstrate to obtain an order for specific performance include:
A Valid and Enforceable Contract: There must be a legally binding contract with clear and definite terms.
Breach by the Defendant: The defendant must have breached the contract by failing to perform their obligations.
Plaintiff’s Performance or Readiness to Perform: The plaintiff must have either performed their obligations under the contract or be ready, willing, and able to do so.
Inadequacy of Legal Remedy (Monetary Damages): The plaintiff must demonstrate to the court that monetary damages would not be a sufficient remedy to compensate for the loss caused by the breach. This is often the key factor.
Feasibility of Performance: The court must be convinced that it is reasonably possible for the defendant to perform their contractual obligations. Courts will not order specific performance if it is impossible or would cause undue hardship.
Mutuality of Remedy (in some jurisdictions): Some jurisdictions require that the remedy of specific performance must be available to both parties to the contract.
Fair and Equitable Contract: The contract itself must be fair and equitable. A court is unlikely to order specific performance of a contract that is unconscionable or the result of fraud or duress.
“Clean Hands” Doctrine: The party seeking specific performance must have acted fairly and in good faith in relation to the contract.
In Texas (your current location):
Texas courts recognize specific performance as an equitable remedy for breach of contract, particularly in real estate transactions. The party seeking specific performance in Texas must generally prove:
Compliance with the contract, including tender of performance (unless excused).
Readiness, willingness, and ability to perform at the relevant times.
The contract is enforceable.
Monetary damages are inadequate.
In summary, specific performance is a powerful, but not always available, remedy in contract law that compels a breaching party to fulfill their contractual promises when monetary compensation would fall short of making the injured party whole, often due to the unique nature of the contract’s subject matter.
