Specific performance in construction contracts
Specific performance is an equitable remedy available for breach of contract which requires the contract breaker to fulfil their contractual obligations.
Specific performance is not a right, but may be granted at the court’s discretion (as opposed to damages, a contractual remedy available as of right if the claimant proves its loss) in addition to, or instead of damages.
So, for example, where a binding contractual obligation has been entered into to give collateral warranties, in the event of failure to give the warranty, the other party to the principal contract could apply to the Court for an order of specific performance requiring the warranty to be entered into. For such an application to be successful, the wording of the contractual obligation will have to be clear and unambiguous.
In the case of Liberty Mercian Limited v Cuddy Civil Engineering Limited and others, Mr Justice Ramsey decided that whilst the unperformed primary obligations arising from a contract cease on termination, ancillary rights or obligations which have accrued from the performance of the contract, for example, the provision of performance bonds or warranties, survive termination. These are continuing obligations which must be honoured despite the fact that the main contract has come to an end. The Claimant was therefore entitled to the remedy of specific performance to enforce the delivery of executed warranties.
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