How to Seek Specific Performance Action from a Buyer
A sale isn’t completed until the buyer delivers payment and you deliver the property you are selling. Sometimes, a buyer might back out of a sale. In this situation, you might want to seek “specific performance,” which is a court-ordered command to go through with the sale. Specific performance isn’t always available, and in some states sellers cannot get specific performance. After meeting with an attorney, you can file a complaint in court if specific performance is available.
Checking If You Can Request Specific Performance
Check your contract for available remedies.Specific performance is a remedy you can request from the court when you so for breach of contract. In some contracts, however, you might have agreed to a limited, exclusive remedy.
- For example, as the seller, you might have agreed only to keep the earnest money if the buyer breaches the purchase and sale agreement. If so, then you can’t sue for specific performance.
- However, the contract could be silent about what remedies you could get, or the remedy listed in the purchase and sale agreement might not be exclusive. In these situations, you might be able to sue for specific performance.
Look for binding arbitration clauses.A lot of contracts will require parties to take part in arbitration in lieu of going to court. If your contract has this clause, you may be limited in your ability to ask for specific performance by going to court. During arbitration, you will present your case to an arbitrator who will then make a binding decision regarding what each party will need to do.
- Even though you might be required to go through arbitration, you might still be able to get specific performance. Arbitrators have a broad ability to offer relief to the winning party. This often includes the ability to require specific performance.
Analyze whether the contract is valid.You can’t sue for breach of contract unless your contract was valid. To seek specific performance, the contract terms must be sufficiently definite: the names of the seller and buyer, the purchase price, the date and time of delivery, and a description of the property.
- All contingencies must also have been satisfied. A real estate contract has many contingencies. For example, the contract might have been contingent on the buyer getting financing. If they couldn’t get financing, then the contract isn’t valid.
- If even one contingency is not met, then the contract isn’t valid and you can’t sue.
Identify helpful documents.In order to seek specific performance from a buyer, you must prove that you were ready and willing to close the sale.Go through your purchase and sale agreement and check to see what you were required to do before the closing date.
- For example, you might need to show the buyer that you have marketable title (with no defects) by buying a title report. You should gather these documents.
- The purchase and sale agreement might have also required that you complete certain repairs before closing. Document that those repairs have been made—take pictures or video, or get the contractor to swear an affidavit to that effect.
Discuss your options with a lawyer.Seeking specific performance as a seller is rare. In fact, some states prohibit sellers from seeking specific performance.For this reason, you should get a referral to an attorney and ask whether this remedy is available.
- All is not lost if you can’t sue for specific performance. Instead, you could sue for money compensation if you ultimately sold the house to a third party for less than the contract price.
- For example, if your contract was for 0,000 but you only could sell the house to a third person for 0,000, then you could sue for the ,000 difference.
Filing Your Lawsuit
Create a complaint.You will start the lawsuit by drafting and filing a “complaint” with the court. In this document, you need to identify yourself as the “plaintiff,” the buyer as the “defendant,” and then explain how the buyer breached the contract. You also make your demand for specific performance.
- Your court might have printed, “fill in the blank” forms you can use to create a complaint.You can search the court’s website for a form.
- If no form is available, then look for a book of legal forms to find a sample complaint that you could use as a guide to drafting your own.
Find the correct court.You can’t sue the defendant in any court. Instead, you need to sue the buyer in a court that has power over him or her. Generally, you can sue in the county where the buyer lives or in the county where the sale was to take place.
- You should also check whether you need to bring your lawsuit in an “equity” court. Most states have merged their equity courts with their law courts. However, some states, such as Illinois and Delaware, still maintain separate equity courts (called “chancery” courts). If you ask for specific performance, then you should file your complaint in chancery court.
- Visit the website for your state’s court system to see if courts are broken up between law (or “civil”) and equity (“chancery”) courts.
- Also, check your contract for a venue provision. A lot of contracts, especially ones with large companies, will have provisions requiring you to file your case in a specific state court.
File your complaint.Make several copies of your complaint and take the original (and copies) to the court clerk. Ask to file. You should keep at least one copy for your records.
- You will probably have to pay a filing fee, which will vary by court. You should contact the court clerk to check.
Serve notice of your lawsuit on the buyer.The buyer needs notice of your lawsuit so that he or she can respond. You will need to serve a “summons,” which tells the buyer how much time they have to file their response.You can get the summons from the court clerk. Arrange to have the summons served along with a copy of your complaint.
- Generally, service can only be made by someone 18 or older who is not part of the lawsuit. You can’t make service yourself. Instead, you might be able to pay the sheriff to make hand delivery, or you could hire a private process server. Process servers generally charge -75 per service.
- Your server needs to complete a “proof of service” or “affidavit of service” form, which you can get from the court clerk. The server will return the form to you once service has been made. Keep a copy for your records and file the original with the court.
Read the buyer’s response.After you serve notice, the buyer has a limited amount of time to respond. Generally, they have 30 days or so. You should receive a copy of any response filed. The buyer will probably file an “answer.” In this document, he or she will respond to each allegation you made in your complaint, either admitting, denying, or claiming insufficient knowledge to admit or deny each allegation.
- The defendant might also respond by filing their own legal allegations against you. This process, called making a counterclaim, will result in you becoming the defendant if and when those claims are litigated.
- The answer might contain other defenses, since you are suing for specific performance. For example, the buyer could claim that you committed fraud and therefore shouldn’t be able to get an equitable remedy.
Preparing for Trial
Request helpful information from the buyer.After the buyer responds to the lawsuit, you can request information from the buyer in “discovery.” There are many different discovery techniques available. You might not use all of them, since contract disputes can be fairly straightforward. However, you could request the following:
- You might want to serve a Request for Admission on the buyer and ask him or her to acknowledge that the purchase and sale agreement is authentic. This will save time at trial.
- If the buyer claims you committed fraud, then you should request any document that contains the supposedly fraudulent information.
- You should also ask in an “interrogatory” for the names of any people who have relevant evidence.
- One of the most powerful discovery tools is the deposition. During depositions, you will conduct in person interviews with witnesses and parties. The answers during these interviews will be given under oath and they can be used in court.
Oppose a motion for summary judgment.As soon as discovery concludes, the defendant will likely file a motion for summary judgment, which asks the court to immediately end the litigation and rule in their favor. To succeed, the defendant will have to show the judge that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. In other words, the defendant will have to show that, even if every factual assumption is made in your favor, you would still lose at trial.
- To defend against this motion, you will file one of your own. Your motion will show the court that there are still issues of fact that need to be resolved at trial. You will show this by submitting evidence and affidavits to back up your claims.
- If counterclaims were made against you, you might want to file your own motion for summary judgment to try and end the litigation process on those matters.
Attempt to settle.If your case survives summary judgment, you might consider settling before trial. Trials can be incredibly expensive and time consuming. Often, defendants will be willing to settle in order to avoid these costs. Start settlement talks through informal conferences with the other party.
- If informal negotiations do not work, try mediation. During mediation, a neutral third party will sit with both parties to try and find common ground. The mediator will not inject their own opinions and will not take sides.
- If mediation fails, try non-binding arbitration. During arbitration, a judge-like third party will hear evidence from both parties. Then, the arbitrator will draft an opinion stating who he or she thinks should win the case and why. Because this is non-binding arbitration, no party will be required to abide by the arbitrator's opinion unless they agree to be bound.
Organize your evidence.You should look through your papers and come up with a list of witnesses and documents that will help prove that the buyer breached the contract. You will be one witness. You can testify about forming the contract and how you learned the buyer wouldn’t go through with the sale.
- You will also need to introduce your purchase and sale agreement into evidence. You should put an exhibit sticker on it so that you can enter it into evidence. You can find exhibit stickers at an office supply store or by asking the court clerk.
Attend any final pretrial hearings.Before trial begins, your judge will get both parties together to discuss the trial process and schedule. During this meeting, the judge will create a trial road map and schedule with input from you and the defendant. It is important to bring up every issue you want to discuss at trial during this meeting. If an issue fails to make it on the schedule, the judge might not allow you to make arguments about it during trial.
Observe a trial.If you have a lawyer, then he or she should handle all aspects of the trial. However, if you are representing yourself, then you would benefit from sitting in on a trial. Courtrooms are generally public, so you should stop in and see if any trial is ongoing.Sit in the back and pay attention to the following:
- How the parties act. Where do they sit? How do they address the judge? Where do they stand when they question a witness?
- How witnesses testify. What kinds of questions are asked? How are witnesses dressed?
Going to Court
Question your witnesses.You might have witnesses with helpful information. For example, your real estate agent might have found out that the buyer was calling off the sale. You might need the agent to testify as to what was said.
Testify on your own behalf.You will also have to testify. Without a lawyer, you can probably deliver your testimony to the judge in the form of a speech. However, the buyer’s lawyer will still be able to cross-examine you. Remember the following tips for a successful cross-examination:
- Always tell the truth. You will take an oath to tell the truth, so remember to abide by it.
- Listen closely to the question. If you can’t understand the question, then ask that it be rephrased or repeated.
- Don’t guess or give estimates. You can say, “I don’t know” or “I don’t remember.”
- Stay calm. If you get rattled, then you won’t appear as credible as you would if you remained calm. Although the defense attorney might try to rattle you, realize it isn’t personal. Take deep breaths and don’t feel rushed.
- Avoid humor. Treat the occasion seriously.
Cross-examine the buyer’s witnesses.After you present your case, the buyer gets to go second.The buyer might put on witnesses, depending on their defense.
- For example, if the defendant claims you used a false misrepresentation to get them to sign the contract, then someone might testify as to what you allegedly said.
Deliver your closing argument.Because you are seeking an equitable remedy, a judge (not a jury) will hear your case.You will make your closing argument to the judge. Remember to hit all of your points:
- You had a valid contract because all contingencies were satisfied and the contract was sufficiently definite.
- You were ready and willing to close the sale.
- The buyer breached the contract without any justification.
- All of the buyer’s defenses are false or unproven.
- You are entitled to specific performance.
Receive the verdict.The judge might deliver the verdict immediately, or the judge might take the issue under advisement and issue a verdict later.If you win, then the judge might schedule the date when the sale must be closed.
- If you lose, then you should consider bringing an appeal. With an appeal, you ask a higher court to overturn the verdict because the judge made a mistake. You have a limited amount of time to file a Notice of Appeal (usually 30 days or less), so talk to an attorney quickly and discuss whether you should appeal.
Video: What is Specific Performance? Miami Breach of Contract Attorney Explains
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