Specific Performance Of Contract For Sale Of Land Or Real Estate
Specific performance is unique and is thought to be a remedy that is equitable when monetary damages are not sufficient to enact the resolution of a legal dispute.
Basics
When one party fails to honor a contract, the party that has been harmed may want actual performance of the contract terms as opposed to monetary compensation. This arises when a court orders the party to fulfill the contract. It includes some of the following elements:
- A valid and binding contract
- Damages that have otherwise been inadequate to satisfy the injured party
- Mutual obligation where both parties have performed duties as per the contract
- The discretion of the judge.
The moving party must display they have performed their contractual obligations and the party is still able to uphold the continuation of said obligations.
Buyers Who Sue For Specific Performance
If the seller is not willing to carry out their contractual obligations the buyer may pursue specific performance. The buyer has to tender the purchase price for this to be granted. When the court orders this, it will make the seller convey the property as per the contract between themselves and the buyer. From time to time there may also be a reduction in the cost of purchase. When a buyer is looking for specific performance, they may file a notice of pendency preventing property transfer during the ongoing situation.
Sellers Use For Specific Performance
When a buyer does not want to complete a sale there are states allowing the seller to file a lawsuit for specific performance against the buyer. This is allowable as long as there is symmetry between the remedies available. However it is not always possible, for example, in areas where the state thinks monetary damages are sufficient. Sometimes the language of the contract san state whether specific performance is possible. If the contract allows for a remedy of one type, it may not be permissible. For example, the deposit being non returnable may be considered an exclusive remedy for the situation. And like the buyer, the seller will have to show they performed all the obligations of the contract prior to requesting this remedy.
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