Specific Performance and Injunctions

• Author: John D. McCamus
• Pages: 975-1029

975

CHAPTER 23

SPECIFIC PERFORMANCE

AND INJUNCTIONS

A. INTRODUCTION

As an alternative to the claim for damages for breach of contract, the

victim of a breach may be able to pursue specif‌ic relief in the form of

an order of specif‌ic performance or an injunction.1 An order of specif‌ic

performance is a court order that directs the party in breach to per-

form the very acts that the party in breach promised to perform in

the agreement. An order granted against a defaulting seller of goods

under a contract for the purchase and sale of goods would require the

seller to deliver the goods to the buyer. An injunction is a court order

directing that the party in breach refrain from doing something that

the party in breach promised in the agreement not to do. An employee

who breached a postemployment non-competition clause, for example,

might be enjoined from competing with his or her former employer.

For the victim of a breach of contract, the availability of specif‌ic relief

might appear to be the perfect expression of the expectancy principle.2

By obtaining an order that t he plaintiff w ill either do or not do the very

1See generally R.J. Sha rpe, Injunctions and Specif‌ic Perfor mance, 4th ed. (Aurora:

Canada L aw Book, 2012) [Sharpe]; G. Jones & W. Goodhart, Specif‌ic Perfor m-

ance, 2d ed. (London: Butterwort hs, 1996); E. Yorio & S. Thel, Contra ct Enforce-

ment: Specif‌ic Perform ance and Injunctions, 2d ed., loosele af (New York: Aspen

Publishers, 2011). For a more general account of equitable remedie s, see J.

Berryman, The Law of Equitable Rem edies (Toronto: Irwin L aw, 2000).

2See generally Ch apter 22, Section B.

THE LAW OF CONTR ACTS976

thing promised in the agreement, the innocent party will be placed, it

might seem, in precisely the position he or she would have been in had

the contract been performed.

The remedies of specif‌ic performance and injunction are equitable

in nature in the sense that they were developed by the Courts of Equity

rather than the Courts of Common Law.3 The equitable origins of these

remedies are signif‌icant for a number of reasons. First, the enforce-

ment mechanisms of Courts of Equity and Courts of Common Law

were starkly different. The ty pical order of a court of common law is an

order that the defendant pay a certa in amount of money to the plaintiff.

Should the defendant fail to comply with the order, the plaintiff may

invoke the enforcement machinery of the common law that essentially

enables the state to seize and realize the value of some of the defend-

ant’s assets in order to obtain the resources to satisfy the plaintiff’s

judgment. At common law, a writ of execution would be issued en-

abling the sheriff to seize as much of the assets of the defendant as wa s

necessary to carry out this objective. The enforcement mechanism of

the Courts of Equity was very different. The form of the order of an

equity court was to direct the defendant personally to do or not do

that which had been promised to be done or not to be done. Failure to

carry out the order constituted a contempt of the court, thereby expos-

ing the defendant to proceedings for criminal contempt or, indeed, to

civil proceedings for civil contempt at the instigation of the plaintiff.

Such proceedings, in either case, could result in the imposition of the

sanction of imprisonment. In explaining the difference between these

two modes of enforcement, it is often said that the common law acted

in rem or against the property of the defendant, whereas equitable de-

crees operated in personam or against the defendant personally. Thus,

in considering whether or not to grant equitable rather than common

law relief, courts have taken into consideration the potentially more

oppressive effect of equitable forms of relief.

A second implication of the equitable origins of sp ecif‌ic relief arises

from the essentially curative role performed by courts of equity. The

animating principle of equity jurisprudence is that equity has a juris-

diction to cure defects in the common law. To the extent that courts of

equity remain true to this mandate, they would intervene with the de-

velopment of new rights and remedies only in circum stances where the

rights and remedies available at common law were in some sense inad-

equate. Accordingly, it is well established that equitable relief and, in

3For a brief discu ssion of the historical di vision between common law and

equity, see Chapter 1, Sect ion B.

Specif‌ic Perform ance and Injunctions977

particular, specif‌ic relief for breach of contract, is available only in cir-

cumstances where the common law remedy of damages does not pro-

vide adequate relief to the plaintif f. A third implication is that equitable

relief is generally considered to be di scretionary in nature. Accordingly,

courts of equity, in granting such relief, assert the existence of a discre-

tion to withhold or grant relief depending on the circumstances of the

particular case, including the morality of the conduct of either one or

both of the parties. Although the most common grounds for exercising

that discretion have crystallized in the form of well-recognized limita-

tions on or defences to the granting of relief, fur ther considered later in

this chapter, it is doubtful that the discretionary nature of the remedies

can be completely def‌ined or conf‌ined by such doctrines.

In subsequent sections of this chapter, we will discuss the grounds

upon which specif‌ic relief in the form of decrees of specif‌ic perform-

ance or injunctions are made available to the innocent party for breach

of contract. Consideration will then be g iven to the potential impact on

that availability of contractual stipulations that purport to constrain or

facilitate such relief.

B.SPECIFIC PERFORM ANCE

1) Introduction

The basic principle concerning the awarding of decrees of specif‌ic per-

formance requiring the party in breach personally to perform the obli-

gation that has been breached is that such relief is available only on an

exceptional basis. In the normal case, then, the innocent party must

be content with a claim for damages for breach of contract. The central

limitation on the availability of such relief is a general rule that specif‌ic

relief is available only where the remedy of damages at common law is,

in some sense, inadequate. We will examine later the general nature of

that test as it is applied in t he context of certain st andard types of trans -

actions. There are, however, other limiting principles. Thus, it is com-

monly said that equity will not grant such a decree where it potentially

involves the court in the supervision of complex tasks or obligations to

be performed over a long period of time. Further, and less defensibly,

specif‌ic relief will not be available, or so it is said, when the remedy

is not one that is potentially available to both parties. This so-called

doctrine of mutuality has been a source of considerable confusion in

the law relating to specif‌ic performance. Specif‌ic relief is denied where

the order operates unfairly by privileging an unworthy plaintiff or im-