Remedies - Specific performance and injunction

Learning Outcomes

This article examines specific performance and injunction as equitable remedies on the MBE, including:

• How to distinguish when legal damages are adequate versus when equitable relief is available and strategically preferable.
• The required elements to plead and prove specific performance, with emphasis on validity and definiteness of the contract, feasibility of enforcement, and modern mutuality principles.
• When courts will grant specific performance for land sale contracts, unique or hard‑to‑replace goods, and personal service arrangements through negative covenants.
• The structure and function of temporary restraining orders, preliminary injunctions, and permanent injunctions, and how to analyze mandatory versus prohibitory orders.
• The role of equitable defenses—such as laches, unclean hands, hardship, mistake, misrepresentation, impossibility, and sale to a bona fide purchaser—in narrowing or defeating equitable relief.
• Step‑by‑step approaches for attacking MBE questions that blend contracts, torts, and equity, requiring you to compare damages, specific performance, and injunctive relief and select the best answer.
• How to spot common exam distractors that misstate when equity is available, such as orders compelling personal services or disregarding a bona fide purchaser.

MBE Syllabus

For the MBE, you are required to understand the principles governing equitable remedies, specifically specific performance and injunctions, as alternatives or supplements to legal damages, with a focus on the following syllabus points:

• Distinguishing legal and equitable remedies and recognizing when equity will intervene.
• Prerequisites for specific performance: valid and definite contract; inadequacy of legal remedy; feasibility of enforcement; mutuality of remedy (modern view); and satisfaction of conditions precedent.
• Application of specific performance to contracts involving land, unique or otherwise irreplaceable goods, and personal services (including covenants not to compete and negative injunctions).
• Equitable defenses: laches, unclean hands, hardship, mistake, misrepresentation, impossibility/impracticability, and sale to a bona fide purchaser.
• Requirements for injunctive relief (TRO, preliminary injunction, permanent injunction): irreparable harm, likelihood of success on the merits, balancing of hardships, and public interest.
• Distinguishing mandatory from prohibitory injunctions and understanding enforcement through contempt.
• Limits on injunctive relief in areas implicating constitutional rights (e.g., prior restraints on speech).

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Specific performance is most likely to be granted as a remedy for breach of a contract involving:
   1. Sale of a widely available consumer electronic device.
   2. Provision of standard accounting services.
   3. Sale of a unique parcel of real estate.
   4. A contract to lend money.
2. Which of the following is NOT a requirement for obtaining a preliminary injunction?
   1. Likelihood of success on the merits of the primary claim.
   2. Proof of completed harm already suffered by the plaintiff.
   3. Plaintiff is likely to suffer irreparable harm if the injunction is not granted.
   4. The balance of hardships favors the plaintiff.
3. The equitable defense that bars a plaintiff from relief due to unreasonable delay in bringing the claim, which prejudices the defendant, is known as:
   1. Unclean hands.
   2. Estoppel.
   3. Laches.
   4. Waiver.

Introduction

Equitable remedies are judicial responses developed by courts of equity to do justice in situations where money alone is not enough. On the MBE, the primary equitable remedies tested are:

• Specific performance – an order compelling a party to perform a contractual obligation.
• Injunctions – orders compelling a party to act or to refrain from acting in a particular way.

Legal remedies (primarily monetary damages) are the default. Equitable relief is extraordinary and is only available when damages are inadequate and when equitable principles—including fairness to both parties and to third parties—support intervention.

Key Term: Equitable Remedy
A non-monetary judicial remedy, such as specific performance or an injunction, granted in the court’s discretion when legal damages are inadequate.

The availability of equitable relief rests within the sound discretion of the court, exercised according to settled principles. Unlike legal damages, which a prevailing plaintiff is ordinarily entitled to upon proof of liability and loss, equitable relief is never automatic. The plaintiff must satisfy specific prerequisites and must overcome any equitable defenses the defendant asserts.

A recurring exam theme is choice of remedy: you will often be asked to pick the best available remedy among damages, specific performance, and the various forms of injunction. To do that, you must:

1. Identify whether the primary claim is legal (e.g., contract, tort) or equitable.
2. Ask whether money damages would adequately protect the plaintiff’s interests.
3. Apply the elements for specific performance or injunctive relief, and check for defenses like laches or unclean hands.

Key Term: Inadequacy of Legal Remedy
The situation where money damages would not fully compensate the plaintiff—because the subject matter is unique, damages are too speculative, the defendant is insolvent, or repeated lawsuits would be necessary—making equitable relief appropriate.

Key Term: Irreparable Harm
Injury that cannot be fully remedied by an award of money damages, or cannot be measured with reasonable certainty, such that the plaintiff needs forward-looking relief to prevent or stop the harm.

Specific Performance

Specific performance is an equitable remedy that compels the breaching party to perform the very act promised in the contract, rather than simply pay damages.

Key Term: Specific Performance
A court order requiring a party to perform a specific contractual obligation, granted when legal damages are inadequate and the contract is otherwise enforceable in equity.

Prerequisites for Specific Performance

On the MBE, think of a checklist. A court will typically require:

1. A valid, enforceable contract with definite and certain terms.
2. Inadequacy of legal remedy.
3. Feasibility of enforcement.
4. Mutuality of remedy (modern, flexible view).
5. Plaintiff’s performance or readiness to perform all conditions precedent.
6. Absence of applicable equitable defenses.

1. Valid Contract with Definite and Certain Terms

Specific performance presupposes an enforceable contract. The basic formation requirements (offer, acceptance, consideration, and no valid defense such as incapacity, fraud, duress, or illegality) must be met. In addition:

• The essential terms must be sufficiently definite (e.g., parties, subject matter, price or formula, and time of performance).
• If the court cannot determine what performance to order, it cannot grant specific performance.

Vague agreements (“we will work out the details later”) are usually not specifically enforceable. For land sale contracts, a property description must be precise enough that the land can be identified from the writing and, if necessary, extrinsic evidence.

Courts can sometimes cure minor indefiniteness by reformation—correcting the writing to reflect the parties’ actual agreement—before ordering specific performance, especially where there is mutual mistake or a drafting error.

2. Inadequacy of Legal Remedy

This is the core requirement. Money damages are considered inadequate when they cannot fully substitute for the promised performance. Common situations:

• Land Contracts

  • Land is legally treated as unique. Courts assume that monetary damages will not place the buyer in as good a position as actually receiving the particular parcel.
  • Specific performance is ordinarily available to both buyer and seller (e.g., seller can compel buyer to pay and take title, buyer can compel conveyance of marketable title).

• Unique Goods (UCC § 2-716)

  • Goods are considered unique when they are one-of-a-kind (e.g., rare paintings, heirlooms, custom-made items, goods in short supply, items with special sentimental value if the parties clearly contemplated that value).
  • Even non-unique goods may support specific performance in “other proper circumstances,” such as when the buyer cannot “cover” (obtain reasonable substitute goods) despite reasonable efforts.

• Difficulty Proving Damages

  • Where profits or losses are too speculative to quantify, or where the breach would cause a multiplicity of lawsuits (e.g., ongoing nuisance), equity may step in.

• Personal Services

  • Specific performance is never available to force someone to perform personal services (e.g., employment contracts, performance contracts), because:
  • Courts cannot practically supervise the quality of performance.
  • Compelling personal labor risks violating the Thirteenth Amendment’s prohibition on involuntary servitude.

  However, the court may issue a negative injunction enforcing a valid covenant not to compete or not to work for a competitor, if reasonable in scope.

Key Term: Inadequacy of Legal Remedy
The principle that equitable relief, such as specific performance or injunction, is only available when monetary damages would not fully or fairly compensate the plaintiff.

3. Feasibility of Enforcement

The court must be able to frame an order it can realistically supervise and enforce:

• Simple one-time acts, like conveying title, delivering goods, or executing a deed, are usually feasible.
• Complex, continuous obligations (e.g., supervising construction over several years, running a business in a particular way) are often considered too burdensome to monitor.
• Personal services are deemed infeasible as a matter of law.

Key Term: Mutuality of Remedy
The modern principle that the court will not grant specific performance unless it can assure that both parties will receive the performance they bargained for, typically by conditioning the decree on the plaintiff’s tender of their counter-performance.

Modern courts no longer insist that both parties could have obtained specific performance at the outset; instead they ensure that the defendant will obtain the plaintiff’s performance (usually payment) as part of the equitable decree.

4. Plaintiff’s Performance and Conditions Precedent

The plaintiff must show:

• All conditions precedent to the defendant’s duty have been satisfied, excused, or waived; and
• The plaintiff has performed, is ready, willing, and able to perform, or offers to perform as part of the decree.

In a land sale contract, for example, the buyer seeking specific performance must be able to tender the purchase price; the decree will typically be conditioned on that tender.

5. Application to Common Contract Types

Land Sale Contracts: Specific performance is the standard remedy when a land sale contract is breached and the buyer wants the land or the seller wants the purchase price.

Key points:

• The seller must be able to convey marketable title at closing; if title is defective but can be cured within a reasonable time, the court may delay entry of the decree.
• If there is a minor defect in title and both parties want performance, the court may order performance with an abatement (reduction) in price to reflect the defect.
• Where time is not “of the essence,” a slight delay by the buyer in tendering the purchase price may not bar specific performance, especially when the delay causes little prejudice.

Contracts for Goods: Under UCC § 2-716, a buyer can get specific performance when:

• The goods are unique, or
• “Other proper circumstances” make damages inadequate, such as an inability to cover despite reasonable efforts.

A seller may be able to get an order compelling the buyer to pay the price where the seller cannot resell the goods at a reasonable price or where the goods have been identified to the contract and are unique.

Personal Services and Covenants Not to Compete: As noted, courts will not order specific performance of personal services. But they may enforce a covenant not to compete by injunction if:

• The covenant protects a legitimate business interest (e.g., trade secrets, customer lists, specialized training).
• The restrictions are reasonable in duration, geographic scope, and subject matter.
• The covenant is not contrary to public policy (e.g., not broadly preventing someone from earning a living).

Worked Example 1.1

Collector contracted to buy a rare, authenticated manuscript signed by a historical figure from Seller for $50,000. Seller subsequently received a higher offer from Museum and refused to deliver the manuscript to Collector, offering instead to pay damages. Collector sued for specific performance. Is Collector likely to prevail?

Answer:
Yes. The manuscript is unique; monetary damages would be inadequate because Collector cannot simply purchase an identical replacement on the open market. Assuming the contract terms are definite and enforcement is feasible, specific performance is the appropriate remedy for unique goods.

Worked Example 1.2

Buyer and Seller enter into a written contract for the sale of Seller’s lakefront property. At closing, Buyer is ready with the full purchase price, but Seller refuses to convey, claiming he changed his mind and offering to pay Buyer $20,000 as “compensation.” Buyer sues for specific performance. Seller argues that Buyer can use the $20,000 to find another lakefront parcel.

Answer:
Buyer should obtain specific performance. Land is legally unique; a substitute parcel would not be considered an adequate replacement, especially when the parties specifically bargained for this property. The contract is definite, Buyer has tendered performance, and enforcement (ordering execution of a deed) is straightforward. The court will order Seller to convey the property in exchange for the contract price.

Worked Example 1.3

Star Athlete signs a two-year contract to play for Team A. The contract also contains a clause stating that Athlete will not play for any other professional team in the league during the contract term. After one season, Athlete signs with Team B and refuses to play for Team A. Team A sues for specific performance to force Athlete to play, or alternatively for an injunction preventing Athlete from playing for Team B.

Answer:
The court will not order specific performance of the personal services contract (Team A cannot force Athlete to play), but it may grant a negative injunction preventing Athlete from playing for Team B. The non-compete is limited in duration (the contract term) and subject matter (professional play in the league), and it protects Team A’s legitimate interest in Athlete’s unique services. Thus, an injunction enforcing the negative covenant is likely, assuming the restrictions are reasonable in scope.

Injunctions

An injunction is a court order compelling a party either to do something (mandatory injunction) or to stop doing something (prohibitory injunction). Injunctions can be issued at various stages of a case and can serve different functions.

Key Term: Injunction
A court order requiring a person to perform or to refrain from performing a specific act, enforceable through the court’s contempt power.

Key Term: Mandatory Injunction
An injunction that commands a party to take affirmative action, such as removing a structure, returning property, or restoring the status quo.

Key Term: Prohibitory Injunction
An injunction that forbids a party from engaging in specified conduct, such as trespassing, disclosing trade secrets, or violating a non-compete covenant.

Types of Injunctions

In federal practice (which the MBE follows), there are three main types of injunctions, distinguished primarily by timing and purpose.

1. Temporary Restraining Order (TRO)

A TRO is a short-term order issued to preserve the status quo until a hearing can be held on a preliminary injunction.

Key Term: Temporary Restraining Order (TRO)
A short-term, pre-hearing injunction issued to prevent immediate irreparable injury before a preliminary injunction hearing can be held.

Under Federal Rule of Civil Procedure 65:

• A TRO can be issued with notice to the adverse party or, in urgent cases, ex parte (without notice) if:
  • Specific facts show that immediate and irreparable injury will result before the adverse party can be heard; and
  • The movant certifies in writing the efforts made to give notice and explains why notice should not be required.
• The movant must provide security (a bond) to cover costs and damages if it later turns out the TRO was wrongfully issued.
• A TRO ordinarily expires in 14 days unless extended for good cause or by consent.

Even when a TRO is issued ex parte, the restrained party must receive actual notice before they can be held in contempt for violating it.

2. Preliminary Injunction

A preliminary injunction is issued before final judgment to maintain the status quo and prevent irreparable harm while the case is pending.

Key Term: Preliminary Injunction
An injunction issued after notice and a hearing, before trial or judgment, to preserve the status quo and prevent irreparable harm pending a decision on the merits.

A party seeking a preliminary injunction must generally show:

• A substantial likelihood of success on the merits.
• Likelihood of suffering irreparable harm before final judgment if the injunction is not granted (i.e., damages would be inadequate).
• The balance of hardships tips in the plaintiff’s favor (the harm to plaintiff without the injunction exceeds the harm to defendant if it is granted).
• The injunction is consistent with the public interest.

Security is usually required, just as with a TRO.

3. Permanent Injunction

A permanent injunction is issued as part of the final judgment, after the plaintiff has prevailed on the merits.

Key Term: Permanent Injunction
A final injunction, granted after a full adjudication on the merits, that provides ongoing relief to prevent or remedy a legal wrong when damages are inadequate.

The elements are similar to those for a preliminary injunction, but now the plaintiff must show actual success on the merits. The court will still evaluate irreparable harm, adequacy of legal remedies, balance of hardships, and public interest before issuing a permanent decree.

Worked Example 1.4

Factory operates next to residential homes and emits noxious fumes late at night, violating local environmental ordinances and significantly interfering with residents' ability to sleep and enjoy their property. Resident sues Factory, seeking a preliminary injunction to stop the nighttime emissions pending trial. Resident presents evidence of lost sleep, respiratory irritation, and inability to use their backyard, along with proof of the ordinance violation. Factory argues an injunction would force costly operational changes. Is Resident likely to obtain a preliminary injunction?

Answer:
Likely yes. Resident can argue (1) likelihood of success (based on nuisance law and ordinance violation), (2) irreparable harm (ongoing health effects and loss of enjoyment of property are difficult to quantify and not fully compensable by damages), (3) balance of hardships favors Resident (serious harm to health and property enjoyment likely outweighs Factory's compliance costs), and (4) public interest favors enforcing environmental laws and preventing nuisance.

Mandatory vs Prohibitory Injunctions

Courts are generally more cautious about mandatory injunctions than prohibitory ones, because:

• Mandatory orders often require more extensive court supervision.
• They can significantly alter, rather than merely preserve, the status quo.

As a result, a plaintiff seeking a mandatory injunction may face a slightly higher practical burden, even though the formal legal standard is similar.

Common uses:

• Mandatory: Remove encroaching structure, return misappropriated trade secrets, clean up pollution, restore lateral support.
• Prohibitory: Stop trespass, halt continuing nuisance, enforce negative covenant, prevent disclosure of confidential information.

Limits on Injunctive Relief

Two important limits often tested indirectly:

• Prior Restraints on Speech
  Injunctions that restrain speech before it occurs are strongly disfavored and trigger strict scrutiny under the First Amendment. Courts almost never enjoin defamatory or offensive speech in advance; they typically allow damages or criminal penalties after the fact. On the MBE, be wary of an injunction that looks like censorship of speech or publication.

• Injunctions Against Criminal Prosecutions
  Federal courts rarely enjoin pending state criminal prosecutions; such relief is usually inappropriate unless necessary to prevent irreparable harm where no adequate remedy exists and there is bad-faith harassment.

Worked Example 1.5

Company A sues Former Employee for taking a confidential customer list and using it to solicit clients for Competitor. Company A proves that the list is a protectable trade secret and that damages are difficult to calculate because lost profits from diverted customers are uncertain. Company A asks the court for a permanent injunction prohibiting Former Employee from using or disclosing the list. Former Employee argues that money damages are sufficient. How should the court rule?

Answer:
The court should grant a permanent prohibitory injunction. Trade secrets are classic candidates for injunctive relief: misuse causes ongoing and hard-to-measure harm, and damages may not deter future misuse. Company A has succeeded on the merits (misappropriation), legal remedies are inadequate, the hardship to Former Employee (being barred from using stolen information) is minimal compared to the hardship to Company A, and the public interest favors enforcing trade secret laws.

Equitable Defenses

Even if all prerequisites for specific performance or an injunction are satisfied, equitable relief may still be denied if the plaintiff’s conduct or the circumstances make it unfair to grant such relief. Equity demands that a plaintiff “do equity” and “come with clean hands.”

1. Laches

Key Term: Laches
An equitable defense barring relief when the plaintiff unreasonably delays in asserting a claim, and the delay causes prejudice to the defendant.

Unlike a statute of limitations (a rigid temporal cutoff), laches is flexible:

• The defendant must show unreasonable delay by the plaintiff in pursuing the equitable claim, and
• Prejudice resulting from the delay, such as:
  • Loss of evidence or witnesses.
  • Significant change in position, investment, or reliance.
  • Increased cost or difficulty in complying with an injunction or order.

Laches can bar or limit specific performance or injunctive relief even if the statute of limitations has not yet run.

2. Unclean Hands

Key Term: Unclean Hands
An equitable defense that denies relief to a plaintiff who has acted unfairly or improperly in relation to the subject matter of the lawsuit.

The misconduct must:

• Be wrongful (e.g., fraud, misrepresentation, bad faith, harassment), and
• Have a close connection to the transaction or dispute for which the plaintiff seeks relief.

General bad character is not enough. The idea is that equity will not assist a plaintiff whose own wrongdoing is part of the story.

3. Hardship

Key Term: Hardship
An equitable consideration under which a court may deny or limit specific performance or an injunction if the burden on the defendant (or the public) would be grossly disproportionate to the benefit to the plaintiff.

Courts may refuse specific performance or modify an injunction where enforcement would:

• Impose extreme or oppressive hardship on the defendant compared to the plaintiff’s gain.
• Negatively affect third parties or the public (e.g., shutting down a critical facility).

However:

• Hardship that is self-inflicted or was clearly foreseeable when the contract was made is less compelling.
• Inadequacy of consideration alone does not automatically bar specific performance, but gross inadequacy is evidence of potential unfairness.

4. Mistake and Misrepresentation

Contract defenses such as mutual mistake, unilateral mistake in limited cases, and misrepresentation can bar specific performance:

• If the parties were mistaken about a basic assumption and the mistake materially affects the exchange, a court may rescind or reform the contract rather than enforce it.
• If one party induced the contract by material misrepresentation (fraudulent or innocent), equity will not compel specific performance of a tainted bargain.

Often, the proper equitable remedy will be rescission or reformation, not specific performance.

5. Sale to a Bona Fide Purchaser

Key Term: Bona Fide Purchaser (BFP)
A purchaser who acquires property for value and without notice (actual, record, or inquiry) of another’s prior rights in the property.

If a defendant has conveyed the subject property to a BFP, specific performance is unavailable against the BFP:

• Equity protects the BFP’s interest; the original plaintiff cannot get the property back.
• The plaintiff’s remedy is limited to damages (or other relief) against the original breaching seller.

This rule is heavily tested in land sale and recording statute questions and interacts with remedies: when property is gone to a BFP, specific performance is off the table.

Worked Example 1.6

Owner contracts to sell Blackacre to Buyer 1. Before closing, Owner instead sells Blackacre to Buyer 2, who pays fair market value and has no notice of Buyer 1’s prior contract. Buyer 1 sues Owner and Buyer 2, seeking specific performance to obtain Blackacre. How should the court rule?

Answer:
Specific performance cannot be granted against Buyer 2, a bona fide purchaser for value without notice. Equity will protect Buyer 2’s title. Buyer 1 may recover damages from Owner for breach of contract, but cannot obtain Blackacre itself.

6. Impossibility and Changed Circumstances

If performance becomes impossible or extremely impracticable due to events not caused by either party (e.g., destruction of the subject matter), equity will not order specific performance:

• A contract to sell a particular building is not specifically enforceable after the building burns down through no fault of the seller.
• An injunction may also be inappropriate if circumstances have so changed that the order would be meaningless or unjust.

Courts can also modify or dissolve injunctions when a significant change in law or fact makes ongoing enforcement inequitable.

Summary

Specific performance and injunctions are powerful equitable remedies that go beyond money damages. For the MBE:

• Always start by asking whether legal damages are inadequate. If not, equity stays on the sidelines.
• For specific performance, ensure the contract is valid, definite, and enforceable; that performance is feasible; that the plaintiff has satisfied conditions; and that no equitable defenses bar relief. Expect specific performance for land and unique goods, but not personal services.
• For injunctions, distinguish TROs, preliminary injunctions, and permanent injunctions. Focus on irreparable harm, likelihood of success, balance of hardships, and public interest.
• Remember that equity is about fairness. Defenses such as laches, unclean hands, hardship, mistake, and sale to a BFP can block equitable relief even when the technical elements are met.

Key Point Checklist

This article has covered the following key knowledge points:

• Equitable remedies (specific performance and injunctions) are discretionary and require that legal damages be inadequate.
• Specific performance requires: a valid and definite contract, inadequacy of legal remedy (e.g., land, unique goods, speculative damages), feasibility of enforcement, and plaintiff’s satisfaction of conditions precedent.
• Specific performance is normally available for land sale contracts and unique goods, but never to compel personal services; negative injunctions may enforce reasonable non-compete clauses.
• Injunctions come in three main forms: TROs (short-term, sometimes ex parte), preliminary injunctions (to preserve the status quo pending trial), and permanent injunctions (final relief).
• To obtain preliminary or permanent injunctive relief, a plaintiff must show irreparable harm, likelihood of success on the merits, that the balance of hardships favors relief, and that the public interest is not disserved.
• Mandatory injunctions require affirmative acts and are granted more cautiously than prohibitory injunctions that simply restrain conduct.
• Laches (unreasonable delay plus prejudice) and unclean hands (plaintiff’s misconduct relating to the dispute) can bar equitable relief even when the statute of limitations has not run.
• Hardship, mistake, misrepresentation, impossibility, and sale to a bona fide purchaser can limit or defeat specific performance and injunctions.
• Courts rarely grant injunctions that amount to prior restraints on speech; such orders usually violate the First Amendment.

Key Terms and Concepts

• Equitable Remedy
• Specific Performance
• Inadequacy of Legal Remedy
• Irreparable Harm
• Mutuality of Remedy
• Injunction
• Mandatory Injunction
• Prohibitory Injunction
• Temporary Restraining Order (TRO)
• Preliminary Injunction
• Permanent Injunction
• Laches
• Unclean Hands
• Hardship
• Bona Fide Purchaser (BFP)