Specific performance

A signed letter of intent or purchase agreement feels binding, and often it is — but "binding" does not automatically mean the other side can be forced to close. Specific performance is an exceptional remedy, not the default one, and a court has to be persuaded that ordering the sale to actually happen is the right outcome rather than just awarding compensation.

Why it comes up more in a business sale than in a typical contract dispute

A private, closely held business is often unique enough — a particular customer base, a lease location, a licence, a team — that no amount of money reliably buys an equivalent replacement on short notice. That uniqueness is exactly what makes damages look inadequate to a court, which is why specific performance is discussed more seriously in business sales than in a contract for something replaceable, like a shipment of standard inventory.

Where people get it wrong

• Assuming a signed agreement guarantees the deal will close if either side gets cold feet
• Underestimating how slow and expensive it is to actually litigate for specific performance relative to a deal timeline
• Not realizing most disputes settle for money before a court ever orders anyone to close

A Canadian wrinkle worth knowing

Quebec’s civil law tradition treats performance in kind as a creditor’s primary right under the Civil Code of Quebec, available on a more straightforward basis than in the common law provinces, where specific performance remains a discretionary, equitable remedy granted only when the court finds damages genuinely inadequate. That is a real mechanism difference, not just a difference in emphasis.