Specific performance is a legal remedy that requires a person to fulfill exactly what they promised in a contract. Unlike money damages which try to pay for losses, specific performance makes someone do precisely what they agreed to do. The Supreme Court describes it as “[t]he remedy of requiring exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon” (Chanelay Development Corporation v. GSIS, G.R. No. 210423, 2021).

When Can You Ask for Specific Performance?

This remedy isn’t available in every situation. You can typically ask for it when:

1.Money can’t fix the problem – Some contracts involve unique or irreplaceable items (like a particular piece of land) where money payment doesn’t truly solve the issue.
2.Someone broke their promise – Specific performance becomes an option when a party fails to do what they promised in a contract (Chanelay Development Corporation v. GSIS, G.R. No. 210423, 2021).
3.The other party acted dishonestly – Courts are more likely to order specific performance when someone has acted in bad faith, as shown in Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. (G.R. No. 106063, 1996).

When Specific Performance Is Not Available

Not an option in “contracts to sell” – In Ayala Life Assurance, Inc. v. Ray Burton Development Corporation (G.R. No. 163075, 2006), the Supreme Court decided that specific performance cannot be used in a contract to sell when the buyer doesn’t pay the price. This is because non-payment is not seen as breaking a promise but as failing to meet a required condition. When this happens, the contract becomes ineffective, and you cannot ask for specific performance.

The Element of Bad Faith in Specific Performance Cases

The presence of bad faith significantly influences specific performance cases in Philippine law. The Supreme Court has placed special emphasis on this element, particularly in cases involving property rights.

In Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. (G.R. No. 106063, 1996), the Court examined a case where a property owner violated another party’s right of first refusal by selling to a third party without first offering it to the rightful party. The Court found that this violation demonstrated bad faith, stating that the property owner “clearly acted in bad faith” by “completely disregarding and ignoring” the contractual right.

The Supreme Court ruled that when such bad faith exists, specific performance becomes not just available but necessary to properly address the wrong. The Court ordered the cancellation of the sale to the third party and directed the property to be offered to the party with the right of first refusal at the same terms. This case established that bad faith can be a compelling factor that justifies ordering specific performance rather than merely awarding damages.

Why This Matters to You

Knowing about specific performance helps both individuals and businesses make better decisions about their contract rights. When you enter agreements involving unique property or special rights, specific performance offers protection beyond just money compensation.

Remember that each legal case is different. Whether specific performance will be granted depends on the specific facts, the type of contract, and whether bad faith was involved in the breach of contract.

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Dagsaan Monterde Castillo Law is a full-service law office that practices in various fields of law, including but not limited to Business Retainership, Family and Matrimonial Relations, Civil and Corporate Litigation, Criminal Law, Real Estate Law, Labor and Employment, Administrative and Regulatory Practice, Wills and Probate, Torts and Damages, and Contracts.

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This article is for informational purposes only and does not constitute legal advice. Readers are encouraged to consult a lawyer for guidance on their specific situations