Nonmonetary Relief and Specific Performance

Nonmonetary Relief

Introduction

• The traditional contract law remedy is money damages, whether under common law or the UCC.
• This is the most frequently awarded type of damages for breach of contract claims.
• The goal is typically expectation damages, to put the non-breaching party in the position they would have been in but for the breach.
• Limited circumstances exist where a party may seek nonmonetary relief.
• Adequacy is a historic limitation on equitable remedies.
  • If a plaintiff has an adequate remedy at law (money damages), that's what the court will order.
  • Only when a party doesn't have an adequate remedy at law can they seek a nonmonetary remedy.

Oliver v. Ball (2016)

• Facts: Oliver contracts with the Balls to buy rural Pennsylvania real estate. The Balls back out at the time of closing, and Oliver sues for breach, seeking specific performance.
• Specific Performance: An order from the court directing a party to do or not do something; a form of injunctive relief.
• Oliver testified about the land's features and his investment plans:
  • Long-term investment.
  • Potential timber harvesting.
  • Large parcel suitable for future subdivision.
  • Attached mineral rights for business opportunities.
  • Location five miles from his home.
  • "The sum of the parts of the property are much more valuable than the whole."
• Trial Court: Severed the claim for specific performance from the claim for damages.
  • Breach was not at issue; the only question was the remedy.
  • The trial court denied Oliver specific performance because he didn't show he lacked an adequate remedy at law.
• Trial Court Reasoning: Oliver didn't prove the land was unique.
  • He didn't offer evidence that the timber's quality, quantity, or type was unique or unavailable elsewhere.
  • He didn't offer evidence that the gas rights were unattainable elsewhere in the county.
  • He didn't offer evidence that damages for the loss of these assets were unquantifiable.
  • He didn't prove a significant difference in purchasing price for another property in the same county.
  • He didn't prove the property's value was unique to him, or that the terrain was especially important, or that the property had unique characteristics he couldn't get elsewhere.
  • If the land isn't unique, money allows him to purchase another piece of property. Therefore, he may be entitled to money damages, but not specific performance.

Appeal

• Rule: For breach of a real estate contract, the purchaser may seek specific performance (an equitable remedy) to enforce the contract.
• Specific performance is a surrender of a thing in itself because that thing is unique and thus incapable of duplication.
• A non-breaching party is never entitled to specific performance because equitable remedies are limited by what justice requires.
• Specific performance is not an entitlement in the same way contractual damages are.
• You're relying on the court's equitable powers.

Requirements for Granting Specific Performance

1. Plaintiff must be clearly entitled to such relief.
2. There is no adequate remedy at law.
3. Justice must require the decree.

• Inequity or hardship may be a valid defense.
• A decree may be excused or refused if specific performance would be contrary to equity of justice (e.g., undue hardship on the breaching party, such as the property already being conveyed to a third party).

Real Estate and Specific Performance

• Courts consistently have determined that specific performance is an appropriate remedy to compel the conveyance of real estate where a seller violates a realty contract, and specific enforcement of the contract would not be contrary to justice.
• Specific performance for the sale of land is available because no two parcels of land are identical.
• Each parcel of real estate is inherently unique.
• An award of damages in a land sale contract will not suffice to allow a party to acquire the same parcel of land anywhere else because each parcel of land is itself unique.
• Thus, in the context of realty agreements breached by the seller, we can assume that the buyer has no adequate remedy at law.
• It is the uniqueness of the land that makes money damages an inadequate remedy, and thus real estate buyers are entitled to a remedy of specific, not Atlantic, performance.

Conclusion of Oliver v. Ball

• Because the plaintiff didn't have to prove that he lacked an adequate remedy at law, the court could assume that he lacked an adequate remedy at law, thus entitling him to specific performance.
• Given that all tracts of land have been regarded as unique and the appellant further testified to the property's unique characteristics vis a vis his need, the court agrees that his remedy at law is inadequate.
• Courts in Pennsylvania (and universally in the United States) must enforce specific realty agreements breached by the sellers, except in cases where a hardship or injustice would result.
• Oliver wins and gets an order for specific performance, forcing the balls to convey the property to him.

Limits of the Rule

• All land is unique.
• You may always seek specific performance in a land sale deal.
• Other situations are those in which money would not make the person whole, usually because the goods or service is unique (e.g., collectibles, one-of-a-kind items, fine artwork).
• If a seller backs out at the last minute, the buyer may have a remedy for specific performance.