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a. Illustration of specific performance decree: The classic illustration of a specific performance decree in a contract case is where the promisor has promised to convey a piece of real estate, and without justification refuses to make the conveyance. The court will order her to make the conveyance. If she persists in her refusal, the court will order the recording office to record the conveyance even without the promisor’s participation.

b. Illustration of injunction: The classic illustration of the use of an injunction in a contracts case involves the employee who has breached an employment contract. In this situation, the court will rarely award specific performance, since, among other difficulties, ordering the employee to perform smacks of involuntary servitude. What the court will often do, however, is to prevent the employee from working for a competitor.

Example: D, an opera singer, is under a contract to sing for the City Opera company (located in New York City) during the 1999-2000 season. The contract provides that D will not perform for any other opera company in New York City that season. D then announces that she will not perform at the City Opera, and that she will instead perform at the Metropolitan Opera (also in New York City).

  City Opera will not be able to get specific performance, i.e., an order compelling D to do the scheduled performances with City Opera. But it will probably be able to get an injunction prohibiting D from singing for the Met or any other New York opera company during the season covered by the contract.

i. Limits: But there are significant limits on the injunctive relief likely to be awarded by a court in a personal services case; see infra, p. 305.

B. Limitations on the use of equity: Historically, equitable relief in contract cases (as in other cases) was only given where the common-law remedy was not adequate. Courts today impose fewer restrictions on the granting of equitable relief than they did in earlier centuries. Nonetheless, it remains the case that the standard, and preferred, remedy for breach of contract is the common-law award of damages, and that equitable relief will be given only where the common-law remedy is not adequate. There are three principal pre-conditions to the granting of equitable relief in contract actions:

  • Money damages must be inadequate to protect the injured party;
  • The contract’s terms must be definite enough to allow the court to frame an adequate order; and
  • The court’s task of enforcing and supervising the relief must not be unduly difficult.

We discuss each of these pre-conditions below.

1. Inadequacy of damages: Most importantly, equitable relief for breach of contract will not be granted unless damages are not adequate to protect the injured party. Farnsworth, p. 773. There are a number of reasons for which damages may in a particular case be an inadequate remedy, two of which are as follows:

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