First Principles of Business Law

2. Orders of specific performance

2.1. Specific performance a discretionary remedy

Contractually binding promises are enforceable at law. But what does this really mean? Does it mean that the courts will actually force people to carry out their promises? Or does it mean that if one party doesn't perform as promised, they will be made to pay damages for any loss that ensues, rather than being forced to do what was promised?

The general rule in Australian law is that a court will order a person to actually carry out their contractual obligations only if an award of damages is not an adequate remedy in the circumstances.

For this reason, we say that an order of specific performance is available only at the discretion of the court. In this section we look at examples which illustrate the extent to which the courts will order actual performance of contractual obligations, rather than simply award damages in place of performance.