In some cases where a contract has been breached common-law damages may be inadequate and a plaintiff will be interested in obtaining specific performance instead. This form of relief is an equitable remedy and as such is discretionary. Essentially, if the order is granted, the court will compel the defendant to carry the contract out. As a general rule these contracts need to be evidenced in writing [see: s 54A] unless an exception applies. The form of the order by the court can be fairly simple or perhaps set out in some detail the steps to be taken.
In many instances common-law damages will be sufficient, however, where that is something unique about the contract such as a contract for the sale of land or perhaps the sale of shares in a company the position may be different. In such cases a court may be more willing to find that damages are inadequate and that the contract should be carried out into effect. As such it is fairly common for a purchaser of private land to seek specific performance against a vendor who fails to carry out the contract in breach of its obligations.
There are a number of factors that will go towards the court’s discretion in deciding whether or not to order specific performance. These factors include the following:-inadequacy of damages; illegality; whether there will be a need for the court to constantly supervise (in which case the remedy is unlikely); mutuality of contract (can the defendant also enforce the obligations?); that the plaintiff is ready, willing and able to perform the contract, that the contract is still capable of performance by the defendant, performance by the defendant would not result in undue hardship and other equitable factors such as the need for clean hands on the part of the plaintiff and for there to be no delay in bringing the application.
A defendant may also, in addition to the discretionary matters, raise a number of other defences in applicable circumstances. For instance a defendant who can enliven the Contracts Review Act 1980 (NSW) could potentially say the contract attracts the relief in section 7 against unjust contracts. It is possible that there may also be other defences such as those available under the Australian Consumer Law.
If you are aggrieved by someone else’s breach of your contract and you consider that damages would not be an adequate remedy then please contact us to see if you are entitled to seek specific performance in respect of it.