Specific Performance in an Ontario Business Sale: Can You Force the Other Side to Close?

When the other side to a business deal refuses to close, most people's first instinct is: "Can't a court just make them go through with it?" Sometimes — but not automatically, and not easily. Specific performance is a real remedy in Ontario contract law, but it's an exceptional one, granted at a court's discretion rather than as a matter of course.

Understanding when specific performance is genuinely realistic — and when you're better off pursuing damages instead — can shape how you approach a deal that's falling apart from either side of the table.

What Specific Performance Actually Is

Specific performance is a court order requiring a party to actually perform their contractual obligations — in this context, to go through with closing the business sale — rather than simply pay money to compensate the other side for not doing so. It's an equitable remedy, meaning courts grant it based on discretion and fairness principles, not as an automatic entitlement that flows from proving a breach.

The default remedy for breach of contract in Ontario is damages. Specific performance is the exception, reserved for situations where damages genuinely wouldn't be an adequate substitute for actual performance.

Why Courts Are Cautious About Ordering It

Courts historically developed specific performance for situations involving unique property — most classically, real estate, where every parcel of land is considered legally unique and money can't truly replace a specific piece of land. Extending that logic to a business sale is less automatic, because businesses (and shares in them) are often treated as more fungible — replaceable, at least in theory, by money that lets the disappointed party buy something comparable.

Courts are also cautious about specific performance because:

• It requires ongoing supervision in a way a damages award doesn't — enforcing a "go complete this transaction" order can be more complicated than enforcing a payment.
• It can be a harsher remedy for the breaching party than damages, especially where the party's reasons for balking involve financial distress rather than bad faith.
• Adequate compensation through damages is generally the law's preferred, simpler solution wherever it genuinely makes the wronged party whole.

When Specific Performance Is More Realistic in a Business Sale

• The business (or the shares) is genuinely unique, not just personally significant to the buyer. A distinctive business with characteristics (location, licence, customer base, specialized assets) that couldn't practically be replicated by buying something similar strengthens the argument.
• Damages would be genuinely difficult to quantify — for instance, where the buyer's loss isn't just "the difference in price" but something harder to put a number on.
• **The buyer can show they specifically wanted this business** for reasons a comparable business wouldn't satisfy — an existing location tied to a licence, a specific customer relationship, or similar circumstances a court can point to as more than generic disappointment.
• The buyer is ready, willing, and able to close — courts generally won't order specific performance in favour of a party who couldn't actually perform their own side of the bargain (for example, a buyer without financing in place).

None of these factors guarantees the remedy — they're the kind of considerations a court weighs, and the outcome remains genuinely uncertain until a judge rules on the specific facts.

Specific Performance vs. Damages: Weighing the Choice

What Pursuing Specific Performance Actually Involves

1. Confirming your own readiness to perform — you generally need to show you were, and remain, ready, willing, and able to close on your own obligations.
2. Building the record for uniqueness — evidence about the business, why it can't be readily replaced, and why damages wouldn't make you whole.
3. Moving promptly — delay in seeking relief can undermine the argument that timely, actual performance (rather than money, later) is what you genuinely need.
4. Being prepared for a longer process than a damages claim — courts weigh discretionary equitable remedies carefully, and this typically isn't a fast track compared to some other options.
5. Having a fallback strategy — most litigants pursuing specific performance also plead damages in the alternative, so that if the court declines to order performance, the claim doesn't fail entirely.

Frequently asked questions