Specific Performance


What Is Specific Performance?

Specific performance is an equitable remedy available under Australian contract law.

To remedy a breach of contract, the Court can issue an Order for a party to do a specific act. For example, the Court may order the breaching party to complete the contract. This is referred to as specific performance.

Our litigation lawyers have extensive experience in contract disputes. If you require advice to protect your rights, contact us.

Suing For Breach of Contract

A valid contract is legally binding and enforceable through the Courts.

After the formation of a contract, the parties to the contract must comply with the terms of the contract. A party can take action against another party if they do not perform their duties per the agreement.

What Is Breach of Contract?

If a party does not uphold their obligations under a contract, a breach occurs.

If the breach causes another party to suffer loss, that party can seek a remedy from the Court.

We have written in-depth about what constitutes a breach of contract here:

Remedies The Courts Can Issue for Breach of Contract

Generally, to remedy a breach of contract, the Court can award:

  • monetary damages;
  • specific performance; or
  • an injunction.

Both specific performance and an injunction are forms of equitable relief. An injunction is not necessarily a final remedy, however, and may be an interim step. A party may seek an injunction to protect their interests while pursuing:

  • an Order for monetary damages; or
  • an Order for specific performance.

This article focuses on specific performance. We discuss the other primary forms of relief available for breach of contract here:

When The Court Will Award Specific Performance

Monetary damages are the most common outcome ordered by Courts in breach-of-contract cases. Sometimes, however, monetary damages will not be adequate compensation for the loss suffered. For example, where there is a contract for the supply of unique goods, those goods may not be able to be replaced.

Monetary damages are often not enough to compensate the injured party in cases of:

  • Real Estate; and
  • Personal Property (e.g., custom-made products, goods in short supply, and art objects).

This is because a party is entitled to rely on an expectation that a contract will put them in a particular position. The purpose of any remedy awarded by the Court following a breach is to try to put the party in that position.

In the above cases, monetary damages alone may not achieve this.

Specific performance, however, is an entirely discretionary remedy. This means the Court is not obligated to award specific performance, but may do so in some instances. The most likely instances are for breach of a contract involving the above.

We can review your contract and the breach and provide you with comprehensive advice. This will include what remedies may be available and which would most benefit you. We can then offer guidance on the process to obtain this remedy.

If you believe specific performance would put you in the best position, we can assist you to achieve this. For example, if you have signed a property contract and the other party has terminated in breach.

Should you require legal representation, contact our litigation lawyers for practical advice.

Requirements To Obtain Specific Performance

After a party commences Court proceedings:

  • the allegedly breaching party is the Defendant; and
  • the party suing for their alleged loss is the Plaintiff.

To acquire an Order for specific performance, the Plaintiff must prove that:

  • there was a binding contract in place; and
  • the Defendant breached the contract.

The main elements of a valid contract are:

  1. Agreement;
  2. Consideration; and
  3. Intention.

Agreement usually consists of an offer followed by acceptance between the parties.

Consideration refers to the exchange of something of value.

Intention means that there is evidence both parties intended:

  • to be legally bound by the contract; and
  • execute their obligations under the contract.

A court will not make an Order for specific performance unless there was a valid contract in place.

The Plaintiff must also prove that the Defendant breached the contract. There are two categories that a breach can fall under. These are:

  • an actual breach; or
  • an anticipatory breach.

An actual breach occurs when a party refuses to perform their obligations.

An anticipatory breach occurs when a party:

  • threatens not to perform their obligations under the contract; or
  • becomes unable to perform their obligations under the contract.

Once the Court has determined there is a valid contract and the Defendant is in breach, they will look at:

  • whether the obligations of each party under the contract were clearly established;
  • whether an award of monetary damages would be an adequate remedy;
  • whether completing the contract would require the parties to maintain a personal relationship;
  • whether the Plaintiff has performed their obligations under the contract; and
  • whether enforcing the completion of the contract would cause unconscionable hardship to the Defendant.

After considering these factors, the Court will determine whether to award specific performance.

This can prove a complicated area of law. Sufficient reason is required to persuade the Court to make an Order. Our litigation lawyers have experience resolving disputes and achieving results for our clients. Contact us for start-to-finish guidance through the dispute resolution process.

Alternative Remedies to Specific Performance

In the event the Court is not minded to make such an Order, there may be other remedies available.

Nominal Damages

If the Plaintiff has not suffered considerable loss, they can still be awarded a small sum of money. The amount is often minimal, but enough to sustain the Plaintiff’s vindication in Court.

Expectation Damages

Expectation damages compensate a party for what the contract would have reasonably realised. They are intended to put the Plaintiff in the position they would have been in if the breach did not occur. To award this sum, the Court must be able to calculate the damages to a reasonable certainty.

Liquidated (Or Agreed) Damages

Creating a liquidated damages clause in your contract can:

  • avoid uncertainty in the calculation of damages is there is later a breach; and
  • help to provide efficient compensation to the victim of any breach.

If parties include a liquidated damages clause, damages from a breach are pre-estimated. This is done before the parties sign the contract. If there is then a breach, this clause is used as a fair representation of the loss incurred.

Defences To Breach of Contract

If you are being sued for breach of contract, you may have a defence.

A Defendant to a breach of contract claim will require an affirmative defence to:

  • negate their liability; or
  • limit their liability.

An affirmative defence requires you to introduce evidence that justifies your position.

This could include:

  • a liability clause in the contract that limits a party’s accountability for a breach;
  • factors that render the contract invalid; or
  • force majeure or frustration of the contract. Events outside a party’s control may frustrate their ability to perform a contract. Some events may prevent the completion of the contract. These could include natural disasters, armed conflict, or health crises. Force Majeure is not common law in Australia, however, a specific clause can be written into a contract. If included, it needs to be agreed to by the parties before they sign the contract. Such a clause may end a party’s contractual obligations due to an event no party can be held accountable for.

Of course, the best defence to breach of contract is to mitigate the risk of a breach occurring in the first place. A well-considered contract, drafted by experienced commercial lawyers, can achieve this.

We can:

  • conduct a contract review of a commercial contract before you sign; or
  • draft a contract with consideration to dispute resolution, should you later require it.

To discuss your situation with a commercial litigation lawyer, call us for advice.

Focused On Results

Our experienced lawyers can assist you:

  • to sue for breach of contract; or
  • if you are being sued for breach of contract.

If you have a contact and the other party has committed a breach, we can advise you on the remedies available.

If you have been accused of breaching a contract, we can assist you to resolve the dispute on the best terms for you.

Aitken Whyte Lawyers are focused on results and achieving them commercially and efficiently.

For clear and actionable legal advice from contract experts, contact us.

Office Location and Contact Details


Aitken Whyte Lawyers Brisbane
2/414 Upper Roma Street
Brisbane QLD 4000

Ph: 07 3229 4459
Fax: +617 3211 9311
E: enquiries@awbrisbanelawyers.com.au


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