16. Introduction
As noted above, equitable remedies involve a request for some remedy other than money damages. These remedies generally will be allowed only if money does not provide adequate relief for the non breaching party Examples of equitable remedies for breach of contracts include specific performance, rescission, and restitution. Specific performance is a remedy that requires the party in breach to do exactly what he agreed to do under the contract. Rescission disaffirms (annuls) the contract and returns the parties to the position each occupied before making the contract. Restitution (sometimes called quasi-contract) rectifies unjust enrichment by forcing the party who has been unjustly enriched to return the item unfairly gained or its value if the item cannot be returned. These remedies are discussed in more detail in the following sections.
17. Specific Performance
The legal remedy of dollar damages or the equitable remedy of rescission may not be adequate to provide a proper remedy to a party injured by a breach of contract. The only adequate remedy may be to require the branching party to perform the contract. This remedy is called specific performance. It is used in contracts involving real estate and personal property; it is not available for contracts involving relationships and services.
Specific performance is granted in cases when the court in the exercise of its discretion determines that dollar damages would not be an adequate remedy. Specific performance is not a master of right but rests in the discretion of the court. To warrant specific performance, the contract must be clear, definite, complete, and free from any suspicion of fraud or unfairness. Dollar damages are considered inadequate and specific performance is the proper remedy when the subject matter of the contract is unique. Since each parcel of real estate differs from every other parcel of real estate, all land is unique, and courts of equity will therefore specifically enforce contracts to sell real estate. Examples of unique personal property are antiques, racehorses, heirlooms, and the stock of a closely held corporation. Such stock is unique because each share has significance in the power in control the corporation. Items readily available in the marketplace are not unique.
The Uniform Commercial Code provides that specific performance they be decreed when the goods sold are unique or in other proper circumstances [2-716] The Code retains the traditional requirement that the goods be unique and that there be no adequate remedy law. However, the Code also allows this specific performance remedy in other circumstances, which generally means that the goods cannot be bought elsewhere at a reasonable price. For example peaches and oranges are not unique. But if an early severe frost destroys most of the peaches and oranges, drastically raising the price of the surviving crop, a court might award specific performance to a buyer in a contract to sell peaches and oranges.
18. Rescission
The equitable remedy of rescission is available in a variety or circumstances. It may be granted by a court of equity when a transaction has been induced by fraud or mistake. Rescission will also be granted to a minor in order that he may exercise his privilege of withdrawing from a contract. It is also used as a remedy if one party's breach of a contract is so substantial that the other party should not be required to perform either. This is covered in detail in chapter 12.
A party who discovers facts that warrant rescission of a contract has a duty to act promptly. If he elects to rescind, he must notify the other party within reasonable time. So that rescission may be accomplished when parties may still be restored, as nearly as possible, to their original positions. A Party entitled to rescission may either avoid the contract or affirm it. Once he makes his choice, he may not change it. Failure to rescind within a reasonable time is tantamount to affirming the contract. The party who seeks rescission must return what he has received in substantially as good condition as it was when he received it. Since this remedy is an equitable one, it is subject to the usual maxims of courts of equity.