What is Specific Performance in Contract Law
Specific performance is an equitable remedy in British Columbia that compels a party to fulfill their contractual obligations when monetary damages are inadequate, most commonly applied in real estate disputes, but also available in cases involving unique goods or shares.
Contracts are the backbone of commercial and personal transactions. When one party fails to fulfill their obligations, the law provides remedies to protect the interests of the non-breaching party. While damages are the most common remedy for breach of contract, they are not always sufficient. In cases involving unique subject matter, the courts may grant an equitable remedy known as specific performance.
This blog provides a comprehensive overview of specific performance in British Columbia, including its legal foundation, application in real estate and other contexts, limitations, procedural requirements, and recent case law. Whether you are a property owner, developer, shareholder, or legal professional, understanding this remedy is essential for enforcing contractual rights when money alone is not enough.
What Is Specific Performance?
Specific performance is a court-ordered remedy that requires a party to perform their contractual obligations as agreed. It is not available in every case and is granted only when damages would be inadequate to compensate the non-breaching party.
Specific performance is rooted in equity, meaning it is discretionary and based on principles of fairness. The court considers the nature of the contract, the conduct of the parties, and whether the remedy is appropriate under the circumstances.
Legal Foundation in British Columbia
Specific performance is governed by common law and equitable principles. It is not codified in a single statute, but its application is shaped by case law and procedural rules.
The Supreme Court of British Columbia has jurisdiction to grant specific performance. The remedy is typically sought in conjunction with a claim for breach of contract, and may be pleaded as an alternative to damages.
When Is Specific Performance Available?
Specific performance may be granted when the following conditions are met:
A valid and enforceable contract exists
The subject matter of the contract is unique or irreplaceable
Monetary damages would be inadequate to compensate the non-breaching party
The party seeking the remedy has acted fairly and in good faith
The remedy would not cause undue hardship to the breaching party
A common context for specific performance in British Columbia is real estate. Land is considered inherently unique, and courts are more likely to order the completion of a sale rather than award damages.
Application in Real Estate Transactions
Real estate disputes are the classic example of specific performance. When a buyer or seller refuses to complete a transaction, the other party may seek an order compelling performance.
Example
A buyer enters into a contract to purchase a heritage property in Vancouver. The seller later refuses to complete the sale, citing a better offer. The buyer sues for specific performance, arguing that the property is unique and cannot be replaced. The court agrees and orders the seller to complete the sale.
Key Factors
Uniqueness of the property
Location, zoning, or historical value
Limited availability of comparable properties
Buyer’s reliance and preparation
Recent case law confirms that specific performance remains a viable remedy in real estate disputes. In Culos Development (1996) Inc. v. Baytalan, 2025 BCCA 265, the British Columbia Court of Appeal granted specific performance of a property in Kelowna, emphasizing the contextual nature of the remedy.
Application Beyond Real Estate
While real estate is the most common context, specific performance may also apply to other types of contracts involving unique subject matter.
Sale of Shares
If a contract involves the sale of shares in a closely held corporation, specific performance may be appropriate. The shares may represent control, voting rights, or strategic value that cannot be replicated.
Sale of Unique Goods
Contracts for rare artwork, collectibles, or custom-built equipment may qualify for specific performance if the goods are not readily available in the market.
Intellectual Property and Licensing
In some cases, licensing agreements or intellectual property transfers may be enforced through specific performance, especially when the rights are critical to business operations.
Limitations and Discretion
Specific performance is not granted automatically. The court will consider whether the remedy is appropriate based on the circumstances. Factors that may lead the court to deny specific performance include:
The contract is vague or uncertain
The party seeking enforcement has not fulfilled their own obligations
The remedy would cause undue hardship to the other party
The contract involves personal services or ongoing supervision
For example, a court is unlikely to order an individual to perform a personal service contract, such as employment or artistic performance, because it would be difficult to supervise and enforce compliance.
In Bajwa v. Habib, 2019 BCSC 721, the Supreme Court of British Columbia clarified that a party awarded specific performance must be ready and able to complete the transaction. In this case, the court granted specific performance, ordering the defendants to complete the sale within 60 days of the judgment. Further, the court clarified that a party awarded specific performance may still seek damages later if they are unable to close due to the other party’s breach.
Procedure for Seeking Specific Performance
To obtain specific performance, a party must commence a legal action in the Supreme Court of British Columbia and include a claim for specific performance in the Notice of Civil Claim.
Steps
1. File a Notice of Civil Claim outlining the contract, breach, and remedy sought
2. Serve the claim on the defendant
3. Prepare evidence of uniqueness, inadequacy of damages, and readiness to perform
4. Attend case planning and discovery
5. Proceed to trial or summary judgment
6. If granted, the court will issue an order compelling performance
The court may also issue interim orders to preserve the subject matter of the contract, such as a Certificate of Pending Litigation in a real estate dispute.
Strategic Considerations
Assess Uniqueness
Before seeking specific performance, assess whether the subject matter is truly unique. Consider location, scarcity, strategic value, and personal significance.
Document Readiness
Demonstrate that you are ready, willing, and able to perform your obligations under the contract. This includes financing, approvals, and logistical arrangements.
Consider Alternatives
Include a claim for damages in the alternative. This provides flexibility and ensures that the court can award compensation if specific performance is denied.
Seek Legal Advice
Specific performance involves complex legal and procedural issues. A lawyer can help you evaluate your case, prepare evidence, and navigate the litigation process.
Remedies and Enforcement
If the court grants specific performance, it will issue an order requiring the breaching party to complete the contract. The order may include:
A deadline for performance
Conditions or adjustments
Costs and interest
Failure to comply with the order may result in contempt proceedings, fines, or enforcement measures.
In some cases, the court may appoint a third party to complete the transaction on behalf of the breaching party.
Conclusion
Specific performance is a powerful remedy that ensures parties are held to their contractual promises when monetary damages are insufficient. In British Columbia, it is most often used in real estate disputes but may apply to other unique contracts. Because it is discretionary and fact-specific, parties seeking specific performance should obtain legal advice and prepare a strong evidentiary foundation.
At Queenstone Law, we assist clients with contract enforcement, including claims for specific performance. Our team provides practical guidance and representation to ensure that your rights are protected and your agreements are honored. Contact us to learn how we can help you pursue or defend a claim for specific performance in British Columbia.
NOT LEGAL ADVICE. Information made available on the Queenstone Law website in any form is for information purposes only. It is not legal advice. You should not rely on, or take or fail to take any action, based upon this information. We would be pleased to discuss any specific legal concerns you may have.
Although we attempt to keep the information on our site accurate and up-to-date, due to the ever changing nature of the law, as well as, the speed at which new cases are released, we cannot guarantee that the content is fully up to date or remains completely accurate.