## Facts

- Dale and Geraldine Nelsen agreed to sell their 720-acre Minnesota farm to Irvin Hilton, a Missouri real-estate investor, under a written contract dated October 4, 1974.
- The contract was drafted by Hilton’s attorney after extended discussions; the Nelsens were not represented by counsel until after signing.
- The $180,000 price was structured with $2,500 earnest money, $49,700 at closing, and seller financing of $127,800 due in 10 years, with interest-only payments for the first five years, small principal payments in years 6–9, and a large balloon payment in year 10.
- Closing timing favored the sellers’ option to set a May 1, 1975 closing with notice, otherwise requiring closing no later than May 1, 1976.
- Title and possession would pass at closing, with the sellers taking a mortgage or deed of trust; the Nelsens later testified they believed they had signed a contract for deed under which title would be retained until final payment.
- Hilton’s obligation to perform was conditioned on obtaining an owner’s title insurance policy “without exceptions,” although the property was subject to typical easements and reserved mineral interests that would require exceptions.
- After the parties recognized exceptions were unavoidable, Hilton demanded a $16,000 price reduction; the Nelsens refused, and Hilton initially declined to close.
- Hilton later indicated he would close without a reduction, but the Nelsens then refused to close.
- Hilton sued for specific performance and for damages measured by the farm’s rental value after the contractual closing date while the Nelsens remained in possession.
- The trial court found the Nelsens in breach, ordered specific performance, and awarded Hilton fair rental value damages for the post-closing period.

## Issues

1. Whether specific performance of a land-sale contract should be denied when, considering the totality of the circumstances, enforcement would be unconscionable or inequitable.
2. If specific performance is denied, what disposition should be made of the buyer’s claims for monetary relief, including rental-value damages.

## Decision

- The Minnesota Supreme Court reversed the decree of specific performance as an improper exercise of equitable discretion under the circumstances.
- The court concluded the contract’s structure and formation made specific enforcement inequitable, including one-sided terms and seller misunderstanding coupled with reliance on the buyer’s attorney.
- The court held Hilton was not entitled to equitable relief because legal damages could adequately compensate him.
- The court remanded for a new trial at law on the issue of damages, leaving Hilton to pursue monetary relief rather than compelled conveyance.

## Legal Principles

- Specific performance is a discretionary equitable remedy, not an automatic entitlement in land-sale contracts.
- A court will deny specific performance when enforcement would be unconscionable or inequitable under the totality of the circumstances.
- Equity considers whether the party seeking specific performance is attempting to secure an unfair advantage through one-sided contract terms.
- Lack of mutuality of remedy is a significant factor, including where one party has broad cancellation rights while the other’s remedies are materially limited.
- A material misunderstanding about the nature of the transaction, particularly when one side relies on the other side’s attorney, may weigh against specific performance even if the contract is not rescinded.
- Specific performance is generally inappropriate when an adequate remedy at law (money damages) exists.

## Conclusion

The court denied specific performance of the farm-sale contract because the agreement’s one-sided remedies and formation circumstances made equitable enforcement unjust, and it remanded for a new trial on legal damages as the proper remedy.


Hilton v. Nelsen, 283 N.W.2d 877 (Minn. 1979)