Most of the time, when a contract goes wrong, the practical outcome is pretty simple: someone pays compensation (damages) and you move on.
But in some situations, money doesn’t really fix the problem. Maybe you contracted to buy a unique piece of equipment, a particular property, or a business-critical asset - and now the other side is refusing to follow through.
That’s where specific performance can come in. This article explains what specific performance is in New Zealand, when it might be available, and what you can do if you need the other party to actually do what they promised. We’ve also kept this guidance current and aligned with how contracts are commonly managed today (including digital contracting and fast-moving commercial deals).
Specific performance is a court order requiring a party to perform their contractual obligations (instead of paying damages).
In plain terms, it’s when the court says: “You can’t just pay your way out of this - you have to do the thing you agreed to do.”
Specific performance is an equitable remedy, which means:
- It’s discretionary (the court doesn’t have to grant it, even if there’s a breach).
- It’s guided by fairness and practical realities, not just strict legal rights.
- It often comes with conditions (for example, the party asking for it must also be ready and willing to perform their side of the bargain).
It’s also worth noting that you usually only get to the “specific performance” stage if you have an enforceable contract in the first place. If you’re unsure whether your deal was binding, it helps to understand what makes a contract legally binding before you invest time and money into a dispute.
It’s not the most common remedy - damages are typically the default - but specific performance can be very powerful in the right situation.
For business owners, it often comes up where the subject of the contract is unique or hard to replace (or where replacement would be expensive, slow, or commercially disruptive).
Specific performance isn’t “automatic”. Even if the other side has clearly breached, the court will usually ask: is it fair and practical to force performance?
While each case turns on its facts, specific performance is more likely where:
- Damages wouldn’t be an adequate remedy (money can’t truly compensate you for the loss).
- The contract terms are clear and certain enough to enforce.
- You have acted fairly (equity expects “clean hands”).
- You have not delayed unreasonably in asserting your rights.
- Enforcement would not require constant court supervision.
Here are some scenarios where specific performance is commonly discussed in practice:
- Sale and purchase of land (property is considered unique, so damages may not be enough).
- Sale of a business or business assets where the asset is unique (for example, a particular premises, specialised equipment, or a one-of-a-kind brand asset).
- Transfers of shares
If your dispute is tied to a business sale or acquisition, it’s also important to understand how your contract is structured and what your rights are if the other party tries to back out - disputes like this often hinge on the wording and whether key conditions have been satisfied. (For example, whether you have an unconditional contract.)
Key Legal Context In NZ
In New Zealand, contract disputes commonly involve the Contract and Commercial Law Act 2017 (for example, around cancellation and remedies in some contexts), but specific performance itself is traditionally an equitable remedy developed through the courts.
That means the outcome often depends on:
- the nature of the contract (what it requires, and how “replaceable” it is),
- the conduct of the parties, and
- whether a court order would actually solve the problem (rather than create a new one).
If you’re dealing with a breach of contract, specific performance is only one possible remedy. Often, the better commercial option is still to pursue damages - especially where you can source an alternative supplier or replacement product quickly.
Damages (Compensation)
Damages aim to put you in the position you would have been in if the contract had been performed properly (as far as money can do that).
This is usually the simplest remedy to claim, because a court can quantify a dollar amount without needing to supervise ongoing behaviour.
Specific performance aims to make the other side follow through.
It can be especially useful where:
- you can’t easily “cover” (replace) what was promised,
- timing is critical, or
- the contract is part of a wider transaction (for example, a business purchase where several steps depend on each other).
Cancellation Or Termination
Sometimes you don’t want the contract performed anymore - you want out.
Depending on the contract terms and the type of breach, you may be able to cancel and pursue other remedies. If you’re weighing this up, it’s worth getting advice early, because the timing and wording of cancellation notices can matter a lot. In many cases, the dispute becomes less about “who breached” and more about whether cancellation was done correctly under the contract and relevant law.
Where this is relevant, terminating a contract needs to be handled carefully so you don’t accidentally create new legal risks for your business.
Injunctions (Stopping Someone From Doing Something)
Specific performance requires someone to do something. An injunction is usually about stopping someone from doing something.
In some disputes, your lawyer might consider an injunction alongside (or instead of) specific performance - for example, stopping a supplier from selling a contracted item to someone else while the dispute is resolved.
Because specific performance is discretionary, the court will usually look at a mix of legal and practical factors. Here are the big ones business owners should understand.
1. Is Money An Adequate Remedy?
This is often the key question. If you can be properly compensated with money (and the loss can be measured), the court may say damages are enough.
But if what you contracted for is unique - or the loss is hard to quantify - the argument for specific performance gets stronger.
2. Are The Contract Terms Clear Enough To Enforce?
The court can’t order someone to perform a vague or incomplete obligation.
If the agreement is missing key terms, internally inconsistent, or uncertain, specific performance becomes harder (and sometimes impossible).
This is one of the reasons it’s risky to rely on informal arrangements, recycled templates, or vague email “agreements” - especially for large transactions or long-term supply deals.
Courts generally don’t want to be in the role of “project manager”.
So, if the contract requires ongoing judgment calls, quality assessments, or continuous supervision (for example, “provide ongoing marketing services to a high standard”), a court may be reluctant to order specific performance.
On the other hand, if it’s a one-off, clearly defined action (for example, “transfer the shares” or “deliver the specified machine”), it’s more workable.
4. Have You Acted Fairly (Clean Hands)?
Because this is an equitable remedy, your conduct matters. If you’ve contributed to the problem, acted misleadingly, or tried to take unfair advantage, the court may decline to help.
For example, if the dispute involves misleading statements made during negotiations, that can overlap with issues like misrepresentation. If you’re unsure how that works, misrepresentation is a common “deal gone wrong” issue that can affect remedies and leverage in settlement discussions.
Specific performance is not just about the other side’s obligations - it also assumes you are (and were) ready to perform your obligations.
So if you’re asking the court to force the seller to transfer an asset, you’ll generally need to show you were ready to pay the purchase price and comply with your contractual steps.
6. Would It Cause Undue Hardship Or Be Unfair?
Even if the contract is valid and breached, the court may refuse specific performance if forcing performance would cause undue hardship that is out of proportion (especially if circumstances have changed significantly).
That said, “it’s inconvenient” or “we found a better deal” is not usually a good reason to avoid a contract.
If you’re thinking about specific performance, the most important thing is to move strategically - because your early steps can shape the outcome.
Step 1: Check The Contract And Evidence
Start by pulling together:
- the signed contract (and any schedules/attachments),
- relevant emails, texts, and messages,
- invoices, payment records, and delivery timelines,
- any variation agreements or change requests.
If the contract signing process itself is unclear (for example, someone signed “for” a company without authority), that can become a threshold issue. In business settings, this sometimes ties into whether someone had authority to bind the entity (and whether the agreement is enforceable in the way you expect).
Step 2: Consider Urgency (Do You Need An Urgent Court Order?)
Sometimes, waiting will make the problem worse - for example, if the other side is about to sell the asset to someone else, or a property settlement date is approaching.
In urgent cases, your lawyer may consider interim relief (like an interim injunction) to preserve the position until the dispute is resolved.
Often the first legal step is a formal letter setting out:
- what the contract requires,
- how the other party has breached,
- what you want them to do (and by when), and
- what remedies you will pursue if they don’t comply (including specific performance and costs).
This step sounds straightforward, but wording matters - especially if it might later be used in court. A demand that accidentally treats the contract as ended (when you actually want it performed) can create unnecessary complications.
Step 4: Try To Resolve Commercially (If Possible)
Even when you’re “right”, court proceedings are expensive and slow. Many specific performance disputes settle once both parties understand the risks.
A practical settlement could include:
- an amended completion date,
- additional assurances (for example, a deed confirming obligations),
- partial performance plus compensation, or
- mutual termination plus a release.
Where parties reach a final settlement, they often document it in a formal deed. If you’re settling a contract dispute, a Deed of Settlement can be a clean way to record the outcome and prevent the dispute from popping up again later.
Step 5: Court Proceedings (If You Have To)
If the matter can’t be resolved, you may need to file proceedings (usually in the High Court for many specific performance claims, depending on the subject matter and value).
In court, you’ll generally need to show:
- there is a valid and enforceable contract,
- the other party has breached (or intends to breach),
- damages are inadequate, and
- it is fair and practical for the court to order performance.
Because specific performance is discretionary, it’s not only about proving breach - it’s about persuading the court that performance is the right remedy.
Specific performance isn’t just an “academic” legal concept. It can matter a lot for small businesses - especially where a single contract is tied to your ability to operate, grow, or complete a major transaction.
Buying Or Selling A Business
Imagine you’re buying a small business and the seller tries to pull out late in the process (after due diligence and planning). If the deal is structured as an asset sale or share sale with clear obligations, you may want to push for completion rather than just damages.
This is one of the reasons it’s so important to have a properly drafted sale agreement from day one - not only to set the commercial terms, but to make enforcement realistic if things go sideways.
Supply Of Unique Goods Or Equipment
If you’ve contracted for a specialised piece of machinery or a unique batch of goods (for example, custom-manufactured items), you might not be able to replace it quickly without missing your own deadlines.
Specific performance is more likely to be argued where replacement is genuinely difficult and the contract obligations are clear.
Share Transfers In Private Companies
In closely held companies (like many NZ SMEs), shares aren’t traded on a public market. If someone is contractually required to transfer shares (or allow a share transfer) and refuses, damages can be hard to assess.
It’s also common for company documents to regulate share transfers. If you’re running (or investing in) a company, a Shareholders Agreement can help prevent disputes about exits, transfers, and deadlocks in the first place.
Contracts That Are “Operationally Critical”
Sometimes the contract isn’t unique in theory - but it’s critical in practice. For example, you rely on a particular commercial space, equipment hire arrangement, or supply chain relationship to meet customer obligations.
In these cases, the legal strategy often involves a mix of remedies (specific performance, injunctions, damages, and negotiated outcomes) rather than a one-size-fits-all approach.
Key Takeaways
- Specific performance is a remedy where the court orders a party to perform their contractual obligations, instead of simply paying damages.
- It’s an equitable and discretionary remedy - you don’t automatically get it just because there’s been a breach.
- Specific performance is more likely where damages aren’t adequate, such as contracts involving unique assets (often land, specific goods, or private share transfers).
- The court will consider whether the contract terms are clear and enforceable, whether performance is practical, and whether it would require ongoing court supervision.
- Your conduct matters - equitable remedies generally require you to act fairly, move promptly, and be ready and willing to perform your side of the contract.
- If you’re facing a breach, it’s crucial to get advice early on the best remedy (damages, termination, settlement, injunctions, or specific performance), because the wrong step can weaken your position.
If you’d like help enforcing a contract (or working out whether specific performance is realistic in your situation), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
