Specific enforcement: Overview, definition, and example
What is specific enforcement?
Specific enforcement refers to a legal remedy that compels a party to perform their obligations under a contract as agreed, rather than simply paying monetary damages for a breach. This remedy is typically sought when the subject matter of the contract is unique or irreplaceable, such as real estate, rare goods, or intellectual property, where monetary compensation would not adequately resolve the harm caused by the breach.
For example, if a seller refuses to transfer a one-of-a-kind artwork after a valid purchase agreement, the buyer may seek specific enforcement to compel the seller to complete the sale.
Why is specific enforcement important?
Specific enforcement is important because it ensures that parties to a contract fulfill their unique obligations when monetary damages are insufficient to address the harm caused by a breach. For SMBs, this remedy is especially useful in transactions involving irreplaceable assets, custom goods, or services that are critical to business operations.
Including a specific enforcement clause in contracts provides clarity and assurance to parties that they can compel performance if the other party fails to meet their contractual obligations, reducing the risk of disputes and protecting the integrity of the agreement.
Understanding specific enforcement through an example
Imagine an SMB enters into a contract to purchase a commercial property for its operations. The seller agrees to the sale but later attempts to back out, even though the SMB has met all the contract’s terms. Since commercial real estate is unique and essential for the SMB’s needs, the company seeks specific enforcement to compel the seller to transfer the property.
In another scenario, a manufacturing company contracts with a supplier to produce a custom machine critical to its production process. If the supplier refuses to deliver the machine, the company may pursue specific enforcement to ensure the machine is delivered, as no other supplier can provide the exact equipment.
An example of a specific enforcement clause
Here’s how a specific enforcement clause might appear in a contract:
“The Parties agree that, in the event of a breach or threatened breach of this Agreement, monetary damages may be insufficient to remedy the harm caused. Therefore, the non-breaching Party shall have the right to seek specific enforcement of this Agreement, in addition to any other remedies available at law or in equity, to compel the breaching Party to perform its obligations hereunder.”
Conclusion
Specific enforcement ensures that parties to a contract fulfill their obligations when monetary damages cannot adequately address the harm caused by a breach. For SMBs, this remedy is crucial in transactions involving unique or irreplaceable assets. Including a specific enforcement clause in contracts provides assurance and legal recourse for ensuring performance, fostering trust, and protecting the interests of all parties involved.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.