Damages are often an inadequate remedy for a failed acquisition, and agreements routinely provide for specific performance. Whether it is available depends on careful drafting.
Express provision. Agreements typically state that the parties are entitled to specific performance, that damages are inadequate, and that the parties waive any requirement to post a bond and any defence that an adequate remedy at law exists. Courts give these effect, though they do not eliminate equitable discretion entirely.
Conditions. Specific performance to compel a buyer to close usually requires that all closing conditions are satisfied, that the seller is ready willing and able, and in financed deals that the debt financing is available. Those conditions are frequently the reason a seller’s claim fails.
The financing chain. Where a buyer’s obligation depends on third-party debt, sellers seek the right to compel the buyer to enforce its financing commitments, and to obtain specific performance conditioned on the financing funding.
Reverse termination fees are the negotiated alternative — a fixed sum payable if the buyer fails to close, sometimes as the sole remedy. Whether the fee is exclusive or cumulative with specific performance is a central term, and ambiguity has repeatedly been litigated.
Mutual availability. A clause available only to one side draws scrutiny.