I happened across a property auction in my neighborhood and I was curious what some of the spiel meant.
So could I actually buy this house for $1 if no one else bids?
What is a specific Perfomance Contract and what would that obligate the buyer to do?
Ill send ya the dollar.
We’ll split the profits.
Did you take a look at the “additional Docs”? Maybe they will answer your question.
Last time I looked at one of those, you had to assume a mortgage, so you were only paying a dollar now, but committing to quite a bit.
No additional docs anywhere. I assume it was taken from boilerplate.
In a contract, one may agree to perform a specific act to satisfy the contract – e.g., a musician contracts to perform his music in a particular place at a particular time. Often, breach of such a contract results in a plea for specific performance, rather than monetary compensation, because the performance is unique, and another person can’t do the same job, money or no money.
I haven’t heard of a specific performance contract, as there are many, many contracts that require performance, and I can’t imagine any specific act related to a house sale that can’t be compensated with money. Maybe that angle of assuming the mortgage? Lawyers?
There will certainly be additional documents somewhere, and the statement you quote puts you on notice of the fact. You may have to ask to see them.
IANAUSL, but I am a lawyer in another common-law jurisdiction. I’ve never heard the term “specific performance contract”. My wild guess is that it refers to a contract in which both parties agree that the remedy of specific performance will be available in the event of breach of contract by either of them (thus simplifying any future litigation).
Specific performance is an equitable remedy that is generally not available unless the aggrieved party can show that there is something unique about the subject matter of the bargain such that monetary damages would not fully make the party whole.
As it happens, real property is the casebook example of just such a subject matter. Thus, while a contract to sell, say, a Honda Civic might give rise to a monetary award (on the premise that the aggrieved party could buy some other, interchangeable Honda Civic out on the market). A contract to sell real property (the house on the northwest corner of State and Maple), on the other hand, would give rise to specific performance.
Obviously, real property generally isn’t truly all that unique in most instances, but that’s how it goes.
Stated in simple terms (IANAL), “specific performance” means that the defendant is required to do what the contract says, instead of just paying money as a penalty for not doing it.
And I would disagree with Nametag’s example - normally specific performance is not available as a remedy in a case of breach of contract for personal services - too close to slavery.
This is actually not the reason why SP is not available in personal services. For instance, if Gaga contracted to perform at a venue and then later said “Eff it!” and a court ordered heard to perform as she had voluntarily agreed to, we would not say “ZOMG! Gaga has been enslaved!! Or something very much like it!”
Instead, specific performance is only a worthwhile remedy where the performance to be undertaken is largely ministerial in nature and not subject to being rendered in a substandard fashion by an unwilling defendant. Selling real property is an example of this; you either sell it or you don’t, there’s no worry that you won’t sell it like you mean it. Performing music, on the other hand, requires the cooperation of the performer and a court can issue orders until it’s blue in the face, but if Gaga doesn’t want to sing “Bad Romance” well, then she isn’t going to sing it.
Note that I didn’t say SP was available as a remedy, only that it would be sought. (Granted, I was not specific about it because I couldn’t remember the appropriate law, and was too lazy to look it up; I was mainly interested in what the hell anyone could mean by "specific performance contract – as far as I can tell, nearly all contracts could be so described).
I agree with the above posters’ description of ‘specific performance’; it’s a remedy rather than a type of contract. Which makes me think it’s a bit of garbled legalese thrown in by the real estate agent to generate interest in the property for sale.
Oh yeah, the OP. Never heard of it as a contract type, only a lawsuit that happens in breach.
Hey lawyers, suppose I write a contract that says, “The buyer shall be held to specific performance of this contract and no other remedy shall be available in case of breach.” Is that enforceable?
(I think what is really going here is that they are announcing their intent to sue for specific performance if the buyer does not perform. They don’t want someone buying it cheap at auction then deciding they don’t want to bother, and they can afford to pay the damages to make it go away.)
Documents just added. Here’s what it says about the specific performance
and
I guess it means if your the successful bidder you must buy the house.
Yes. One must do all the due-diligence before bidding. There are no contingencies, and one can’t change their mind for any reason or the deposit is lost. So, do your homework and base your bid price upon what you find.
I purchased a house at a foreclosure auction. I had to do a title search and make arrangements for a mortgage before I bid, which cost me a pretty penny. If I had not been the high bidder, all those expenses would be for nothing. If I had not done my homework, I would not have known about the $7200 in back real estate taxes which were delinquent, and so were reflected in my bid.
Because of the uncertainty, people don’t usually want to go to any expense before bidding unless they really want it. For this reason, houses at auction usually sell for 65% to 85% of fair market value.