Specific Performance: General Principles

• Author: Jeffrey Berryman
• Pages: 269-312

269

CHAPTER 10

SPECIFIC PERFORMANCE:

GENERAL PRINCIPLES

A. INTRODUCTION

Specif‌ic performance is an equitable remedy that orders a defaulting

promisor to keep her contractual bargain under pain of contempt of

court. The popular notion is that it is a presumptive remedy in the

enforcement of realty contracts and of a secondary nature in any other

contract setting. As we will see, neither of these premises accurately

records the full scope of the remedy.

Specif‌ic performance is a remedy that has been shaped by histor-

ical practice, and many of the rules pertaining to its availability seem

strange today without some appreciation of the past development of

the remedy. In the f‌irst part of this ch apter we will brief‌ly ex plore these

historical antecedents. Recently there has been renewed interest in

specif‌ic performance as a remedy which most closely approximates to

“complete” compensation for breach of contract, and much ink has be en

expended reconciling equity’s chosen contractual remedy with the

compensatory goal of damages. These arguments will also be explored

in this chapter. As will emerge, the dominant arguments inhibiting

specif‌ic performance are concerns over its relationship with the com-

mon law remedy and of changes and perceptions about the inability

of courts to undertake supervision of what is perceived as being an

intrusive and coercive order. As with other equitable remedies, there

are also a number of discretionary barriers to the granting of specif‌ic

performance — these will be discussed in Chapter 11. In subsequent

THE LAW OF EQUITABLE REMEDIES270

chapters, specif‌ic perform ance will be looked at in a number of discrete

areas of contracting.

B. A BRIEF HISTORY OF THE DEVELOPMENT

OF SPECIFIC PERFOR MANCE

Where a promisor’s obligations remain unfulf‌illed, it appears natural

for the promisee to seek specif‌ic per formance. In that way t he promisee

will get complete relief for that which was promised. Why then has the

common law favoured substitutionary rel ief over specif‌ic performance?

To answer this question, one has to appreciate the nature of con-

tracting through hi story.1 If one were to take a look at the manner of con-

tracting in the si xteenth century one would make several observations.

The f‌irst would be the variety of courts in which litigants could

bring an action, which led to much forum shopping: Chancery, the

Law Merchant, Admiralty Courts, and Courts of Request all provided

some form of relief for parol (oral) contracts. Indeed, most of these

courts had a superior process for handling parol contracts than did

the common law courts, and as a result proved very attractive to liti-

gants. Many of these courts were inf‌luenced by European approaches,

practised by merchants and traders throughout Europe as part of the

Law Merchant and by the workings of the earlier Ecclesiastical Courts,

from where the chancellors were often drawn. An important tenet of

the Ecclesiastical Courts was the notion that a person who had failed

to honour his promise imperiled his soul before God. The only way to

remedy this spiritual imbalance was to make the promisor observe his

promise. This tenet was carried over to Chancery Courts by ecclesias-

tically-trained chancellors. In common law, however, the main form of

contracting was through either the action of covenant, which required

specialty (a deed under seal), or the action of debt, by way of penal or

conditional bond. A promisor would create an obligation by entering a

penal bond that was discharged by actually per forming the promise on

the stipulated date or by forfeiting the penal bond. It is in these early

1 See H. Hazelt ine, “Early History of Speci f‌ic Performance of Contract Law i n

English Law ” reproduced in Rechswisse nschaftliche beitrage Juri stische festgabe

des auslande s zu Josef Kohlers (1909); A.W.B. Simpson, A History of the Common

Law of Contract: The Rise of the Act ion of Assumpsit (Oxford: Clarendon Pre ss,

1975); and P.S. Atiyah, The Rise an d Fall of Freedom of Contract (Oxford: Claren-

don Press, 1979).

Specif‌ic Perform ance: General Principle s271

roots that one sees emerging the idea of a monetary payment as being

a substitution for actual performance.

Next, one would observe the total absence of suits based on execu-

tory parol contracts in common law courts. It would be another 200

years before the common law f‌inally developed the writ of assumpsit

(because he promised) which would elevate the promise as being a cen-

tral tenet of contract law.

Third, one would note the importance accorded realty, and the fact

that only in chancery (through the notion of the passing of a “use,”

or benef‌it, thus creating a proprietary interest held by the promisee)

would a purchaser be protected specif‌ically against a vendor’s breach.

In common law, title to land would only pass on conveyance, which

required the strict obser vance of particular formalities.

If one were to advance forward and view a snapshot of contracting

in the seventeenth century, the picture would appear quite similar. For

contracts concerning realty, chancery courts played a decisive role in

enforcement. There were two reasons that explained this phenomenon.

First, realty carried with it not only its economic worth but also

political power and authority, as well as social status.2 Thus, a compen-

satory remedy, which merely substituted damages for actual perform-

ance, would not result in the transfer of these ephemeral qualities.

The second reason was the subordination of contract by property

concepts. Chancery, which had created the passing of a use to denote

when property had exchanged, was inextricably tied to what Horowitz

has called a “title theory of exchange.”3 Entrapped in this conceptual

framework, chancery courts were slow to react to the nascent ideas of

the bilateral executory contract4 that were about to emerge, and which

became so important in the creation of new forms of property. Realty

still formed the single most important form of property that could be

bargained, and this ensured the continued importance of chancery’s

2 See D. Cohen, “The Relationsh ip of Contractual Remedie s to Political and Social

Status: A Prel iminary Inquir y” (1982) 32 U.T.L.J. 31, who points out the in extri-

cable link bet ween land ownership and pol itical enfranchis ement at the time.

3 See M.J. Horwitz, The Transformat ion of American Law, 1780–1860 (Cambridge:

Harvard Un iversity Press, 1977). Central to a tit le theory of exchange is t he

notion that the cont ract is being enforced becau se it alone effects an exchan ge

of ownership in t he property, which is the subject of the contr act. The simple

presence of a promi se within the contract i s not the reason justify ing specif‌ic

enforcement. In th is sense, equity mir rored the old common law by creati ng a

proprietar y interest, the equitable int erest, and ordered its conveyance.

4 A bilateral exe cutory contract is a contract in wh ich the reciprocal excha nge of

promises bet ween two parties is t he immediate consideration for en forcement

without the need for any s teps of actual performan ce having taken place.