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Remedies • Contract - Equitable Remedies
REM#061
Legal Definition
Courts will not specifically enforce personal services contracts, because they pose an involuntary servitude problem. Courts will, however, specifically enforce covenants not to compete so long as (1) the services are unique, and (2) they are reasonable in geographic and durational scope.
Plain English Explanation
When a court is deciding whether to make someone do something they promised in a contract (this is called "specific performance"), they consider if it's actually possible to make sure that person does it. Here's how they decide:
(A) If the contract is about personal services (like singing or acting), the court won't force someone to do it. Why? Because making someone work against their will is like forcing them into slavery, which is a big no-no.
(B) But, if the contract says someone can't work somewhere else or do a certain job (this is called a "covenant not to compete"), the court might enforce it. There are two conditions though:
(1) The service or job they're being stopped from doing must be special or unique.
(2) The restrictions on where and for how long they can't work must be reasonable.
(A) If the contract is about personal services (like singing or acting), the court won't force someone to do it. Why? Because making someone work against their will is like forcing them into slavery, which is a big no-no.
(B) But, if the contract says someone can't work somewhere else or do a certain job (this is called a "covenant not to compete"), the court might enforce it. There are two conditions though:
(1) The service or job they're being stopped from doing must be special or unique.
(2) The restrictions on where and for how long they can't work must be reasonable.
Hypothetical
Hypo 1: Bob, a famous singer, signs a contract with Sam's event company to perform at a concert. Later, Bob decides he doesn't want to. Sam goes to court to make Bob sing. Result: The court won't force Bob to sing because it's a personal services contract and forcing him would be like involuntary servitude.
Hypo 2: Bob, a renowned chef, signs a contract with Sam's restaurant promising not to open his own restaurant in the same city for 5 years. Bob breaks the promise and plans to open a restaurant after 2 years. Result: The court might stop Bob because the service (cooking) is unique, especially because of his reputation, and the time restriction (5 years) is reasonable.
Hypo 3: Bob, a software developer, signs a contract with Sam's tech company agreeing not to work for any competitor in the entire country for 20 years. Bob later gets a job offer from a competitor in a different state. Result: The court might not enforce the contract because while software development can be unique, a 20-year nationwide restriction isn't reasonable.
Hypo 4: Bob, a regular office worker, signs a contract with Sam's company agreeing not to work for any other company in the same industry. Bob later gets a similar job in a different industry. Result: The rule doesn't apply here because Bob isn't working in the same industry, so he's not breaking the contract.
Hypo 5: Bob, a gardener, signs a contract with Sam agreeing not to garden for anyone else in the neighborhood. Bob later gardens for another neighbor. Result: The court might not enforce this because gardening isn't a unique service, so the rule about unique services doesn't apply.
Hypo 2: Bob, a renowned chef, signs a contract with Sam's restaurant promising not to open his own restaurant in the same city for 5 years. Bob breaks the promise and plans to open a restaurant after 2 years. Result: The court might stop Bob because the service (cooking) is unique, especially because of his reputation, and the time restriction (5 years) is reasonable.
Hypo 3: Bob, a software developer, signs a contract with Sam's tech company agreeing not to work for any competitor in the entire country for 20 years. Bob later gets a job offer from a competitor in a different state. Result: The court might not enforce the contract because while software development can be unique, a 20-year nationwide restriction isn't reasonable.
Hypo 4: Bob, a regular office worker, signs a contract with Sam's company agreeing not to work for any other company in the same industry. Bob later gets a similar job in a different industry. Result: The rule doesn't apply here because Bob isn't working in the same industry, so he's not breaking the contract.
Hypo 5: Bob, a gardener, signs a contract with Sam agreeing not to garden for anyone else in the neighborhood. Bob later gardens for another neighbor. Result: The court might not enforce this because gardening isn't a unique service, so the rule about unique services doesn't apply.
Visual Aids
Related Concepts
How does election of remedies affect a claim for rescission?
If a contract has a liquidated damages clause, is specific performance still an option?
What are common defenses to specific performance?
What are defenses to rescission?
What are equitable remedies in contract?
What are the defenses to formation?
What happens if a plaintiff is entitled to rescission but has already performed?
What is reformation?
What is rescission?
What is specific performance and when it is applicable?
What is the part performance exception to the Statute of Frauds?
What type of mutual mistake is sufficient for rescission?
When applying specific performance to a land purchase contract, what happens if a buyer breaches a "time is of the essence" clause with a forfeiture clause?
When applying specific performance to a land purchase contract, what happens if the quantity of land is in dispute?
When assessing reformation, what constitutes sufficient grounds?
When assessing specific performance to acquire a unique piece of property, when is uniqueness tested?
When assessing specific performance, what must the status be of a plaintiff's contractual conditions?
When assessing specific performance, why are money damages sometimes an inadequate legal remedy?
When assessing whether money damages are inadequate for specific performance, why does it matter whether a piece of property is unique and what kind of property is always unique?
When is personal property considered unique enough to trigger specific performance?
Will courts grant rescission for a unilateral mistake?
