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Specific performance in construction law: Breach of contract remedies

by | Jun 8, 2021 | Construction Law

Many people enter into contracts with people/companies they believe are the best fit for the job. This certainly is true with construction contracts. When you enter into a contract, each party is agreeing to meet certain obligations. For owners, this means paying for the work done. For contractors, this means fulfilling the work that needs to be done. When one party does not fulfill their end of the agreement, it is considered a breach of the contract. One remedy to a breach of contract claim is “specific performance.” Although it is used much less than the other remedies available, it is an important remedy to understand.

Breach of contract remedies

When a contract is breached, the non-breaching party has a few remedies to choose from. Some of these remedies include:

  1. Sue for Breach of Contract seeking Monetary Damages only;
  2. Sue for Breach of Contract seeking Specific Performance only; or
  3. Sue for Breach of Contract seeking both Monetary Damages and Specific Performance.

In most circumstances, the non-breaching party seeks monetary damages through a breach of contract action. Generally, these damages include payment to compensate for time, materials, lost revenue, costs, and other resources lost because of the breach of contract.

Although this is true in most cases, sometimes monetary damages may not meet the needs of the non-breaching party. This typically occurs where the purpose of the contract involves something very unique. In such a situation, monetary damages may not suffice because the service/product at the heart of the contract cannot be performed/provided by anyone else. An easy example is a contract for a unique piece of art by a specific artist. No other artist can provide the same piece of art and, therefore, monetary damages may not suffice to cover the breach. The court can determine that the actions agreed to in the contract need to be fulfilled if money alone cannot resolve the issue at hand.

Specific performance is one remedy for a breach of a contract.

Why might specific performance be used?

Specific performance is only used in very few circumstances. These may include situations where the true amount of damages is very difficult to determine or the subject of the contract is unique. Specifically in construction law, this may occur if the parties have skills or provide services that are unique and are hard to be substituted. If the courts deem that monetary damages do not fully compensate the non-breaching party, they may deem specific performance. When specific performance is deemed necessary, the breaching party has to fulfill their obligations stated in the original contract.

Why specific performance is not often used

Specific performance is not a common remedy given. First, there are situations where the contract may be impossible to fulfill. This could be due to something like a safety concern, disability, natural disaster, lack of supplies, etc. If the contract cannot be carried out physically or in good faith, specific performance will not be a viable option. Also, if the contract was created with unfair and unreasonable obligations, specific performance cannot be used. More times than not, monetary damages are deemed the appropriate way to resolve a breach of construction contract claim. Overall, specific performance is the “last” option that would be ordered to remedy a breach of contract.

How to know if your case qualifies for specific performance?

If you want to know what your best options are when involved in a breach of construction contract claim, it is best to consult an experienced construction attorney. McDonald & Kloth, LLC has extensive experience in construction law matters. Give us a call at 262-252-9122 to set up an initial legal consultation.