Contracts, contracts, contracts. We all have a basic understanding of what a contract is: it’s an agreement to do something in exchange for something else. The fundamental elements of a contract are:
Offer: I’ll pay you $50.00 to paint my fence.
Acceptance: Ok, it’s a deal.
Consideration: $50.00 paid to the painter.
Performance: The fence gets painted.
Now what happens if you pay the $50.00 and the painter runs off with it? You can sue the painter for breaching the contract. Have a look at my post on small claims court practice for information on how to do this.
Let’s say you sue and you win. What is your remedy? Can you get the $50.00 back? Absolutely. Can you force the painter to paint the fence (a remedy known as specific performance)? No. Ohio law is pretty clear that specific performance for a contract for personal services is not an available remedy. The reasoning behind this is the “mischief” that could result by forcing a party to perform a service after breaching a contract.
What is “mischief” as the courts put it? Well, let’s think about it. The painter is going to be pretty upset and disgruntled when the Judge orders him to go paint a fence. The painter might do a poor job. Worse yet, maybe a few nails holding the fence together go missing. Also, the fence’s owner might sit there and ridicule the painter while he’s painting like the villain from an old movie, twirling his mustache in a stove-pipe hat.
The “fair” remedy and the one designed to accommodate our emotional culture is to simply force the painter to return the $50.00 and the homeowner can hire a different painter.
Now, buying a house is a different story. Let’s say that Alex enters into a contract to buy Steve’s home and then Alex doesn’t show up to the closing and runs for it. Let’s also presume that all of the other conditions of the contract, such as obtaining financing, conducting inspections and so forth have all been completed. The only thing left is to close the deal and Alex is a no show. In this instance, Steve can get specific performance and a court can order Alex to buy the house.
Specific performance is available for real estate because, where anybody can paint a fence, Steve’s house is a unique piece of real estate. There is no other house quite like Steve’s house and no equivalent remedy for breaching that contract than to order Alex to buy the home. It’s not fair to Steve to allow Alex to get out from under the contract just by paying Steve some arbitrary amount of money for Steve’s trouble. Equally, it would not be fair to Alex to force him to find another buyer or have to pay Steve the full $200,000 contract price in damages and not own the house afterward. So, the most equitable remedy is because Alex agreed to buy that house – he has to buy that house!
Real estate contracts can look complicated. I have spent years representing buyers, sellers, and real estate agents with contract issues. If you have a question, please feel free to contact me.