Remedies for Breach of Contract

§18.2.2 An Introduction to the Means of Enforcement: The Primacy of Monetary Compensation over Specific Relief

The most direct and accurate way of enforcing the plaintiff’s reasonable expectations under the contract would be for the court to grant an order of specific performance of the contract. This is an order to the defendant requiring him to perform as promised. For example, Harpo C. Cord owns the only extant piano known to have been used by Chopin. He entered into a contract with Nick L. Odeon under which he agreed to sell it to Nick for $25 million. Harpo breached the contract by refusing to go through with the sale. Nick’s expectation is to gain the piano in exchange for depleting his bank account by $25 million, so the most accurate means for the court to ensure that he achieves that expectation is to compel Harpo to deliver the instrument against payment of its price. This seems like the most obvious solution, and on these facts—because the piano is unique—the court may see this as the most effective and desirable resolution. However, specific performance is not the norm. It is reserved for unusual cases where damages are shown to be incapable of adequately compensating the plaintiff. More commonly, the plaintiff’s disappointed expectations are compensated for by an award of money.

  Why does the law prefer a money equivalent of expectation over the real thing? The answer lies partly in considerations of practicality and policy, and partly in the traditional dichotomy between law and equity. The practical and policy issues may be illustrated by the following example: Sara Nade, an aspiring singer, had entered a singing competition in the hope of winning first prize, the chance to sing the national anthem at an important sports event. To give herself the best chance of winning, she contracted with Harmony R. Peggio, a voice coach, to receive an intensive period of voice training in the week before the competition. Under their contract Harmony undertook, for a fee of $1,500, to give Sara four hours of coaching every day in that week. A few days before the course of instruction was to begin, Harmony notified Sara that she would be leaving town to do a last-minute concert tour, so she could not give the lessons as promised. Sara’s expectation interest is to have the lessons for $1,500, and therefore the most accurate way of ensuring that Sara gets exactly what she expected would be for a court to compel Harmony to decline the tour and to give the promised lessons. However, in this situation the remedy of specific performance presents a number of problems: It would be difficult for the court to ensure that Harmony put her best efforts into a job that she is forced to do; the compulsion takes on the aspect of involuntary servitude; and the solution is not very efficient if another teacher could be found instead. For these reasons, it makes sense to allow Harmony to go on her tour, but if her breach results in a loss to Sara, to hold her liable to compensate for that loss.