January 21, 2025
- What is specific performance?
It is an equitable remedy for breach of contract in which the Court orders the party in breach to performed or complete the contract.
- Does it only apply to real estate?
No. Although real estate deals gone bad are the classic typical example of situations for specific performance, it can apply to any contract, such as the sale of shares, or sometimes the sale of goods.
- Why mainly real estate?
Because there must be something unique about the deal, or buying a replacement, and suing for damages, will be an adequate remedy for most things other than real estate.
- What does unique mean?
There are three basic types of uniqueness. They are sometimes described in different terms, but they are:
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- Unique characteristics of the property
- Unique suitability of the property for the buyer’s needs
- Unique aspects of the transaction
- What’s this about buying a replacement?
The duty to mitigate (reduce or eliminate your losses) is an issue commonly raised in defence of a specific performance claim, buy buying a replacement, even if it costs more. If the property is truly unique, no adequate replacement can be found. It is up to the Defendant to show that there were opportunities to mitigate.
- Isn’t all real estate unique?
At one time, real estate was presumed to be unique, but in Canada, the law has evolved in the last 30 years, and that presumption no longer applies. It is up to the Plaintiff to demonstrate uniqueness.
- What if the Plaintiff cannot demonstrate uniqueness?
Then the Plaintiff might have to settle for damages- if they have adequately mitigated.
- So why not just mitigate?
If there is true uniqueness, true mitigation is impossible. Also, the Plaintiff must remain ready, willing and able to close, which might tie up their funds or credit.
- Doesn’t that make mitigation impossible?
More a gamble than an impossibility. Sometimes, a house is very similar to its neighbours, or a well funded investor developer can find another investment property. It is easier to prove that a family home is unique.
- What about other defences?
All the usual contract defences are possible. In addition, because specific performance is an equitable remedy, equitable defences are available, and equitable remedies are always discretionary.
WHAT WEILERS LLP CAN DO FOR YOU
At Weilers LLP due to our combination of 75 years of real estate and litigation experience equips us to advise you from the time a deal goes wrong, through the entire litigation process. Our counsel, Brian Babcock, teaches about specific performance at the Bora Laskin Faculty of Law.
If you already have a lawyer and they are hesitant to deal with a deal gone wrong, we would be pleased to work with them as counsel to assist them, or to conduct the litigation. We play well with others. Even other lawyers.