Specific performance may be appropriate in a Texas contract dispute when monetary damages cannot adequately compensate the party harmed by the breach. Instead of ordering the breaching party to pay money, a court may order that party to perform a contractual obligation. This remedy is most relevant when the subject of the agreement is unique or difficult to replace.
Because specific performance is an equitable remedy, it is not automatically available whenever someone breaches a contract. The circumstances and terms of the agreement matter.
What Is Specific Performance in a Texas Contract Dispute?
Specific performance requires a party to do what it agreed to do under an enforceable contract. It differs from the usual breach-of-contract remedy, which involves awarding money to compensate for a loss.
Consider a commercial real estate transaction. A Dallas business signs an agreement to purchase a particular property for $2 million. Before closing, the seller receives a higher offer and refuses to complete the sale.
The buyer may argue that damages will not put it in the same position because another property is not an exact substitute for the location, characteristics, or business value of the property it contracted to purchase. Instead of seeking only money, the buyer could ask the court to require the seller to complete the transaction.
When Will a Texas Court Grant Specific Performance?
A party requesting specific performance must establish more than the existence of a disagreement. Courts consider whether the contract and circumstances justify requiring actual performance.
Important considerations generally include whether:
- A valid, enforceable contract exists
- The contractual obligations are sufficiently clear
- The requesting party performed or was ready and able to perform its obligations
- The other party failed or refused to perform
- Monetary damages would not provide an adequate remedy
Specific performance remains discretionary. Even when a contract has been breached, a court must determine whether ordering performance is fair and appropriate under the circumstances.
Why Aren’t Monetary Damages Always Enough?
Money is usually the standard remedy for breach of contract because many financial losses can be calculated.
Suppose a supplier agrees to provide ordinary materials for $100,000 but breaches the agreement. If substantially identical materials are readily available elsewhere for $115,000, damages may compensate the buyer for the additional cost. There may be little reason for a court to force the original supplier to perform.
The analysis changes when there is no reasonable substitute. Real estate is the classic example because each property has unique characteristics. Certain ownership interests, assets, or transactions may also raise questions about whether money can truly replace what was promised.
Can You Get Specific Performance for Any Breach of Contract?
No. Specific performance is an exception rather than the standard remedy.
A court may decline to order it when monetary damages adequately compensate the claimant. Problems may also arise if the contract is too vague for the court to determine exactly what performance is required.
The conduct of the party requesting relief matters as well. Someone seeking specific performance generally needs to show that they complied with their own obligations or were ready and willing to do so. A party that materially breached the agreement may have difficulty seeking a court order requiring the other party to perform.
What Evidence Helps Support a Specific Performance Claim?
The written contract is often the starting point. Its terms need to establish what each party promised and what must occur for the transaction to be completed.
Communications surrounding the breach can help establish that the other party refused to perform. The claimant may also need records showing that it fulfilled its obligations or remained prepared to do so. In the real estate example, that might include evidence that the buyer had financing in place and was ready to close.
Evidence explaining why the subject of the contract cannot reasonably be replaced can also support the argument that damages alone are inadequate.
Should You Seek Specific Performance or Monetary Damages?
The answer depends on what a successful outcome actually looks like.
If the primary goal is compensation for a measurable financial loss, damages may be the more appropriate remedy. If the business needs the particular property, asset, ownership interest, or transaction it bargained for, specific performance may deserve consideration.
The contract itself should also be reviewed carefully. Its remedy provisions, conditions, deadlines, and other terms can affect what relief is available.
Choosing a remedy early can shape how a contract case is investigated, negotiated, and litigated.
Sometimes the Deal Matters More Than the Damages
Winning a contract dispute does not always mean receiving a check. If the value of the agreement lies in obtaining a particular property, asset, or transaction, monetary compensation may not provide the result you originally bargained for.
Ryan G. Cole Law, PLLC represents businesses and individuals in contract disputes throughout the Dallas-Fort Worth area. Trust us to review the agreement, assess the available remedies, and determine whether pursuing specific performance makes sense. Schedule a consultation today.