A fundamental criticism of the English approach to specific performance is that it can be said to convey the impression that breach of contract prima facie destroys the right to performance, and the impression that, only if a party convinces a court to restore the right, can such performance be compelled. This not only communicates a low regard for the normative value of promises (and bolsters the views of reliance theorists), but can be said not to take sufficiently seriously the unlawful behaviour which is breach of contract. The toleration of a position which begins from allowing parties in breach to kill off the right to performance is tantamount to penalising the innocent party and to preferring the behaviour of the breaching party. The justification advanced recently by Smith for the Common law’s reluctance to award specific performance – that such orders are ‘prima facie intrusive of personal liberty’,54 in that they often compel people to render services that they no longer wish to provide, and thus are akin to servitude – is unconvincing. Contracting parties, in the very act of contracting, have already restricted their personal liberty by each binding themselves voluntarily to do something for the other, so the enforcement by courts of duties of performance does no more than affirm the parties’ own targeted restrictions of their personal freedom. The logical conclusion of Smith’s objection would be that all contracts, or at least those pledging personal services, are a kind of servitude, an argument which is unlikely to convince anyone except perhaps the diehard anarchist.

(b)  Mixed legal systems

In the mixed legal systems, a higher theoretical value is placed upon the promises undertaken by contracting parties. This is reflected in, amongst other things, a doctrinal predisposition towards granting ­remedies designed to enforce performance, foremost among them the remedy of specific performance (or specific implement, as it is referred to in Scotland). In Scotland, South Africa and Louisiana, specific performance/ implement is often said to be a ‘primary’ or ‘default’ remedy, that is to say there is a prima facie entitlement to seek the remedy without demonstrating (as in English law) why damages would not be an adequate remedy.55

54Smith, Contract Theory, p. 402.

55PIK Facilities Ltd v. Shell UK Ltd 2005 SCLR 958; Benson v. SA Mutual Life Assurance Society 1986 (1) SA 776 (A); Concise Oil & Gas Partnership v. Louisiana Intrastate Gas Corp. 986 F 2d 1463 (1993).

There are differences in emphasis between the jurisdictions, however. In Louisiana, the remedy has been described as a ‘substantive right’ and as ‘the preferred remedy for breach of contract’.56 On the other hand, in Scotland a more Common law approach is noticeable in judicial remarks that ‘it must always be in the discretion of the Court to say whether the remedy of specific implement or one of damages is the proper and suitable remedy in the circumstances’,57 and there is a tradition of refusing to grant the remedy if to do so would be inequitable.58 In South Africa, though the right to specific performance has been judicially described as a cornerstone of the law, in the same judgment it was noted that (as in Scotland) there is a discretion on the part of the court in whether or not to grant the remedy.59 In practice, in the mixed jurisdictions there are a number of similar recognised circumstances in which the remedy will not be granted,60 such that differences in emphasis in the general descriptions of the entitlement to the remedy ought not to be over-emphasised. Even though there may be a theoretical ‘preference’ for the remedy, a creditor is not compelled to seek performance, and may utilise other remedies, such as damages, should it so wish.

In Scotland, because ultimately a party refusing to comply with an order of specific implement may be imprisoned, the order is unavailable in respect of breach of monetary debts, imprisonment for civil debt having been abolished.61 Instead, in the case of monetary debts, the relevant action for enforcement is an action for payment. This contrasts with South Africa, where both monetary as well as non-monetary obligations are classified as falling within specific performance, though again imprisonment for failure to satisfy an order to pay a monetary debt has been abolished.62 The non-availability of specific implement in Scotland

56J. Weingarten, Inc. v. Northgate Mall, Inc. 404 So 2d 896, 897, 899 (La 1981).

57Moore v Paterson (1881) 9 R 337, 351, per Lord Shand.

58See McBryde, Contract, paras. 23–15, 23–22, and authorities cited there.

59Benson v. SA Mutual Life Assurance Society 1986 (1) SA 776 (A).

60For instance, if performance is impossible, would be impractical, would cause undue hardship to the debtor, or where the inconvenience to the debtor outweighs the advantage to the creditor: see, for instance, Austin’s of Monroe, Inc. v. Brown 474 So 2d 1383 (La App 2nd Cir 1985); Stewart v. Kennedy (1890) 17 R (HL) 1; Amend v. McCabe 649 So 2d 1059 (La App 3rd Cir 1995). In certain classes of contract involving a close personal ­relationship (such as employment contracts) courts may refuse enforcement if the relationship has broken down: McArthur v. Lawson (1877) 4 R 1134; Nationwide Airlines (Pty) Ltd v. Roediger & Anor 2008 (1) SA 293 (W).

61Debtors (Scotland) Act 1880, s. 4.

62The Abolition of Civil Imprisonment Act 2 of 1977 (see also the earlier Civil Imprisonment Restriction Act 21 of 1942).

turns the duty to perform into a compensatory claim: this contrasts with the Common law, where the ability of some other party to perform an act would make it much less likely that an order of specific performance would be granted and, if it were granted, it would only be enforceable against the party who had contracted to perform the act. If the order to perform the act can only be performed by the debtor, then failure to do so will result in fines or possible imprisonment.73 Any fines go to the State, not the promisor, however, so this cannot be said directly to protect the promisor’s interests. There are a number of cases where execution in this manner will not be granted, including promises made in marriage, and (significantly) the duties of an employee under a contract of service.

A claim for performance is excluded where it is impossible for the obligor or any other person to perform.74 Importantly, however, such circumstances do not exclude a claim for damages, because §275(4) provides that in such an event the rights of the obligee are governed by other sections of the Code.75 This seems somewhat odd to a non-German lawyer: why should a duty which it is impossible to perform give rise to a duty to compensate for such non-performance? The logic of so providing has been explained76 as being that what impossibility really entails in German law is only the prevention of a claim for non-performance, but not the negation of the duty to perform itself; thus, because that duty still exists, other claims may lie for the failure to perform, such as damages. While this does have a certain logic to it, it still looks odd to hold a party liable in damages if it is impossible for it to perform its contractual duties.77 Impossibility can mean impossibility either before or after the contract is concluded,78 and can include something for which the debtor was responsible, or not. Objective impossibility (where no one could perform the contract) and subjective impossibility (where it is just the party concerned who cannot perform, for instance because it does not in fact own the item it contracted to sell and the current owner is refusing to sell the item to it) are both included. However, if the debtor can overcome a subjective problem, for instance by buying the goods, even if at

73 §888(1) ZPO. 74 §275(1) BGB.

75Including §280 BGB, on damages for breach.

76Markesinis et al., German Law of Contract, p. 407.

77In Common law and mixed legal systems, post-formation impossibility of performance would frustrate the future performance of the contract, a result which would not give rise to a right to damages.

78By comparison, in English and Scots law pre-contractual impossibility would prevent the contract coming into being, which was the same position taken by the pre-reform German law.

a high price, it is expected to do so and this does not constitute subjective impossibility.79 However, this is subject to the further rule of §275(2), that where the cost of performance becomes ‘grossly disproportionate’ in comparison to the interest of the creditor in receiving performance, this allows the debtor to refuse to perform (and thus creates a sort of deemed impossibility of performance, or what was before the reforms referred to as ‘economic impossibility’). Evidently, the line between efforts which are grossly disproportionate (and which therefore justify non-performance) and those which are not will be hard to determine and predict.80 The Common law also faces the issue of determining when cases of alleged economic impossibility sufficient to trigger the doctrine of frustration exist, but those cases do not involve an uncertain sliding scale of economic hardship but rather a determination of whether the very underlying purpose of the contract no longer exists.

Because, if the conditions are met, §275(1) effectively releases the party affected from the duty to perform, §326(1) provides that in such a case the party released from the duty to perform does not have the right to claim the price. This general rule of the release of both parties in case of impossibility is subject to some exceptions.81

As the particular case of keep-open provisions in leases has been mentioned in relation to other jurisdictions, it may be noted that, as might be expected given the narrative of the general approach of German law above, German courts have compelled tenants to keep open and run businesses in accordance with lease terms obliging them to do so,82 though the specific circumstances of some cases have been held to mitigate against such enforcement.83

It will be appreciated that German law generally places a high regard upon the performance interest of the promisee, and stresses that the promisor is expected to do what it has promised. There are though quirks, from an outside perspective, of German law which have been noted: the second chance to be offered to cure non-conforming performance; the promisee’s right to have an act performed by another party (where possible) with the cost charged to the promisor; and impossibility precluding claims for performance, but not for damages.

79Markesinis et al., German Law of Contract, p. 409.

80See further Zimmermann, New German Law of Obligations, pp. 47–8.

81Discussed by Markesinis et al., German Law of Contract, pp. 409–11.

82See OLG Celle NJW-RR 1996, 585.

83See OLG Naumburg NJW-RR 1998, 873.