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Duane Sales, Inc. v. Carmel

    Brief Fact Summary. The validity of a grant of specific performance in a real estate transaction was at issue.

    Synopsis of Rule of Law. Specific performance should not be granted "if, under the circumstances of the case, the result of the specific enforcement of the contract would be harsh or oppressive, or result in an unconscionable advantage to the plaintiff."

    Facts. The Plaintiff, Duane Sales, Inc. (the "Plaintiff"), entered into a contract to purchase real estate from the Defendant, Carmel (the "Defendant").  The Defendant would not perform.  The lower court ordered the Defendant to specifically perform the contract.  The Defendant appealed and argued that an accounting should be undertaken to calculate the "respective losses and gains during the period of litigation."

    Issue. In determining whether to award specific performance, should the lower court have ordered an accounting concerning "the respective losses and gains during the period of litigation."

    Held. Yes.  The court recognized "that the contract provisions to be enforced be just and equitable, but that the consequences of specific performance likewise be just and equitable."  As such, "[t]he relief should not be granted if, under the circumstances of the case, the result of the specific enforcement of the contract would be harsh or oppressive, or result in an unconscionable advantage to the plaintiff." Applying these principles here, the court concluded that an accounting should be undertaken to assess "the rents received by defendants during the period from the date of the conveyance of the title to the premises; any profits resulting to the defendants in their operation of the property; any losses sustained by the plaintiff because of the delay in conveyance of title; necessary expenses incurred by the defendants in the operation of the property, such as payments of principal and interest on the mortgage, property taxes, insurance, and minor repairs; the benefits to the plaintiff in retaining the use of the purchase money during the pendency of the litigation."

    Discussion. Being that specific performance is an equitable remedy, courts do their best to ensure that it is fairly applied to all parties involved and no party receives an unconscionable advantage.


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