How does specific performance work in a breach of contract?

In the majority of cases involving a contract dispute in the commercial context, the party that claims that a breach of contract has occurred will look for money damages as the remedy for that breach. The purpose of money damages is, to the extent possible, to place the non-breaching party in the same position it would have been in if the breaching party had performed its obligations under the agreement (these are known as “benefit of the bargain” damages).

Sometimes, however, benefit of the bargain damages will not be a suitable remedy in a breach of contract matter. When this is the case, Illinois law provides for other remedies, one of which is specific performance.

Specific performance is an equitable remedy. What this means is that a court will apply it if both the contract and the behavior of the party seeking the remedy are fair, and if an appropriate remedy at law (that is, money damages) is not practical. This may be the case if the subject matter of the contract is so unique that money damages would not suffice to put the non-breaching party into a benefit of the bargain situation. Some contract subject matter that can be the subject matter for a specific performance remedy are contracts involving unique services, or one-of-a-kind goods, or products in short supply.

If it is possible to do so, the court may seek to remedy the plaintiff's injuries through an alternative to specific performance, such as cover or restitution and rescission. An important consideration in this regard is whether the contract requires a specific performance remedy via a provision in its terms and conditions.

This post provides an overview of the remedy of specific performance, and is not meant to be a complete treatment of the topic. A law firm that practices in the area of business contract disputes can help to determine if this particular remedy is suitable to a breach of contract matter.

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