- Published on
Equity and Trust – What Falls Under Specific Performance Under UK Law
Definition
Specific performance is an equitable remedy where the court orders a party to carry out their contractual or trust obligation instead of merely paying damages.
The remedy is discretionary and will only be granted where damages are inadequate and the order is fair, practical, and enforceable.
What Falls Under Specific Performance
1. Contracts for the Sale of Land
This is the most common category.
English law treats every piece of land as unique. Because replacement property may not truly compensate the claimant, damages are often inadequate.
Example
A seller refuses to transfer a house after contracts are exchanged.
The court may order completion of the sale.
2. Transfer of Unique Property
Specific performance may apply where the item is rare or irreplaceable.
Examples include:
3. Certain Commercial Contracts
Courts may grant specific performance where:
A contract to deliver rare machinery unavailable elsewhere.
4. Trust Obligations
Courts may compel trustees to perform duties under a trust.
Examples include:
5. Contracts Involving Shares in Private Companies
Specific performance may be granted where shares are not freely available on the market.
This is because damages may not allow the claimant to obtain equivalent shares elsewhere.
6. Negative Covenants (Indirectly)
Although technically enforced through injunctions, courts sometimes support contractual obligations indirectly through equitable remedies.
Example
A performer contracted not to sing for competitors may be restrained from doing so.
The court is not forcing performance, but is preventing breach of a negative promise.
What Does NOT Fall Under Specific Performance
1. Employment Contracts
Courts generally refuse to compel personal service contracts.
Reasons include:
A theatre company cannot usually force an actor to continue performing.
2. Contracts Requiring Constant Court Supervision
Courts avoid orders requiring ongoing monitoring.
Example
A long-term construction project needing continuous supervision.
The court prefers damages instead.
3. Contracts Where Damages Are Adequate
If money can sufficiently compensate the claimant, specific performance will not usually be granted.
Example
Failure to deliver ordinary goods widely available on the market.
The claimant can simply buy replacements.
4. Uncertain or Incomplete Contracts
Specific performance requires clear contractual terms.
The court will refuse where:
5. Contracts Obtained Unfairly
Equity requires clean hands.
Specific performance may be refused where there is:
6. Discretionary Trust Decisions
Courts usually will not interfere with trustees exercising lawful discretion.
This principle is illustrated in Re Blake.
Example
Beneficiaries cannot normally force trustees to choose them for discretionary payments if trustees act properly.
Practical Scenario
Example 1 – Specific Performance Granted
Sophia contracts to buy a historic countryside manor.
The seller refuses to transfer the property after receiving a higher offer.
The court would likely grant specific performance because:
Example 2 – Specific Performance Refused
A football club attempts to force a player to continue playing under an employment contract.
The court would likely refuse because:
Key Principles for SQE
Specific performance is:
Conclusion
Under UK law, specific performance primarily applies to contracts and trust obligations involving unique subject matter or situations where damages are inadequate. It is especially important in land transactions and trust administration.
However, courts refuse the remedy where enforcement would be unfair, uncertain, excessively supervisory, or inconsistent with equitable principles, particularly in employment and discretionary trust situations.
Definition
Specific performance is an equitable remedy where the court orders a party to carry out their contractual or trust obligation instead of merely paying damages.
The remedy is discretionary and will only be granted where damages are inadequate and the order is fair, practical, and enforceable.
What Falls Under Specific Performance
1. Contracts for the Sale of Land
This is the most common category.
English law treats every piece of land as unique. Because replacement property may not truly compensate the claimant, damages are often inadequate.
Example
A seller refuses to transfer a house after contracts are exchanged.
The court may order completion of the sale.
2. Transfer of Unique Property
Specific performance may apply where the item is rare or irreplaceable.
Examples include:
- antiques;
- rare artwork;
- unique shares;
- historic items;
- family heirlooms.
3. Certain Commercial Contracts
Courts may grant specific performance where:
- the contractual obligation is clear;
- supervision is not difficult;
- damages are inadequate.
A contract to deliver rare machinery unavailable elsewhere.
4. Trust Obligations
Courts may compel trustees to perform duties under a trust.
Examples include:
- transferring trust property;
- distributing trust funds;
- handing over trust documents;
- carrying out administrative duties required by the trust.
5. Contracts Involving Shares in Private Companies
Specific performance may be granted where shares are not freely available on the market.
This is because damages may not allow the claimant to obtain equivalent shares elsewhere.
6. Negative Covenants (Indirectly)
Although technically enforced through injunctions, courts sometimes support contractual obligations indirectly through equitable remedies.
Example
A performer contracted not to sing for competitors may be restrained from doing so.
The court is not forcing performance, but is preventing breach of a negative promise.
What Does NOT Fall Under Specific Performance
1. Employment Contracts
Courts generally refuse to compel personal service contracts.
Reasons include:
- difficulty supervising performance;
- breakdown of trust and confidence;
- concerns about forcing labour against someone’s will.
A theatre company cannot usually force an actor to continue performing.
2. Contracts Requiring Constant Court Supervision
Courts avoid orders requiring ongoing monitoring.
Example
A long-term construction project needing continuous supervision.
The court prefers damages instead.
3. Contracts Where Damages Are Adequate
If money can sufficiently compensate the claimant, specific performance will not usually be granted.
Example
Failure to deliver ordinary goods widely available on the market.
The claimant can simply buy replacements.
4. Uncertain or Incomplete Contracts
Specific performance requires clear contractual terms.
The court will refuse where:
- terms are vague;
- obligations are uncertain;
- important details are missing.
5. Contracts Obtained Unfairly
Equity requires clean hands.
Specific performance may be refused where there is:
- fraud;
- undue influence;
- misrepresentation;
- unconscionable conduct.
6. Discretionary Trust Decisions
Courts usually will not interfere with trustees exercising lawful discretion.
This principle is illustrated in Re Blake.
Example
Beneficiaries cannot normally force trustees to choose them for discretionary payments if trustees act properly.
Practical Scenario
Example 1 – Specific Performance Granted
Sophia contracts to buy a historic countryside manor.
The seller refuses to transfer the property after receiving a higher offer.
The court would likely grant specific performance because:
- land is unique;
- the contract is valid;
- damages are inadequate.
Example 2 – Specific Performance Refused
A football club attempts to force a player to continue playing under an employment contract.
The court would likely refuse because:
- employment relationships require personal cooperation;
- supervision is impractical;
- equity does not compel personal service.
Key Principles for SQE
Specific performance is:
- equitable;
- discretionary;
- available only where damages are inadequate;
- commonly used for land and unique property.
- damages are sufficient;
- enforcement is impractical;
- supervision is difficult;
- the claimant acted unfairly;
- the contract concerns personal service.
Conclusion
Under UK law, specific performance primarily applies to contracts and trust obligations involving unique subject matter or situations where damages are inadequate. It is especially important in land transactions and trust administration.
However, courts refuse the remedy where enforcement would be unfair, uncertain, excessively supervisory, or inconsistent with equitable principles, particularly in employment and discretionary trust situations.
0 Comments