Which is most accurate concerning specific performance?
A) Specific performance is a remedy that allows one party to pay another party in cash or credit after a breach of contract.
B) Specific performance is a contractual remedy wherein the court will order one party to perform to the specifications of the contract because another remedy would not be appropriate.
C) Specific performance does not apply to contract law.
D) Specific performance applies to contract law, but only in regard to capacity and legality.
Answer
B) Specific performance is a contractual remedy wherein the court will order one party to perform to the specifications of the contract because another remedy would not be appropriate.
Explanation
When one party breaches a contract, the court may award the other party a specific performance remedy which requires the breaching party to perform on the contract. This remedy is awarded when damages are not adequate to cover for the non-breaching party or in cases where damages cannot be measured with reasonable certainty. Example, if a buyer buys specific goods from a buyer, if the seller breaches the contract, the court will award the buyer specific performance remedy requiring the seller to provide the goods the buyer had bought.
Barney and Fred have an employment contract. Per their contract, Fred will pay Barney to hide the business' cash earnings as a means of avoiding taxation. The money that Barney is paid to hide is actually money that is subject to federal and state taxes, per the applicable statutes. Which statement is most accurate?
A) Barney and Fred do not have a valid contract because their agreement violates the law.
B) Barney and Fred do have a valid contract but their agreement violates the law.
C) Barney and Fred do not have a void contract because their agreement violates the law.
D) Barney and Fred do not have a voidable contract because their agreement violates the law.
Answer
A) Barney and Fred do not have a valid contract because their agreement violates the law.
Explanation
There is a difference between a void and valid contract. A valid contract is entered legally and is fully enforceable while a void contract is entered illegally and is deemed by a court as invalid. On the other hand, a voidable contract means that one or both parties can void the contract. If a contract involves an agreement to act against the law, the contract is considered void and unenforceable. The agreement between Barney and Fred to hide money subject to taxation violates the law and hence is void, invalid and unenforceable
