Clitherall v. Ogilvie
1 S.C. Eq. 250 (1792)
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Rule of Law:
A court of equity will not decree specific performance of an executory contract for the sale of land if the consideration is so grossly inadequate as to render the bargain unconscionable, hard, and unreasonable, even in the absence of fraud.
Facts:
- Defendant, a young man who had recently come of age, held a one-half interest in a property known as Acheson's Island.
- Defendant was unaware of the true market value of his land.
- Complainant, who was aware of the land's value, was pressingly importunate and made repeated visits to convince the defendant to sell the property.
- Defendant was reluctant to sell immediately, expressing a desire to first consult with a friend about the land's value.
- The parties entered into an agreement for the sale of the land for a specific sum.
- The agreement incorrectly included the entire property, although the defendant only owned a one-half share.
- Subsequent evidence revealed the land's actual value was at least four times greater than the contract price.
Procedural Posture:
- The complainant filed a bill in a court of equity seeking a decree of specific performance to compel the defendant to convey the land as per their agreement.
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Issue:
Does a court of equity have a duty to order specific performance of a contract for the sale of land when the agreed-upon price is grossly inadequate, even if there is no evidence of fraud or imposition by the buyer?
Opinions:
Majority - Unnamed
No. A court of equity is not obligated to decree specific performance for a contract with grossly inadequate consideration, as such a contract is not fair, certain, just, and equal in all its parts. The power to compel specific performance is discretionary and must be governed by the rules of equity. In this case, while there was no fraud, the complainant's eagerness and knowledge, contrasted with the defendant's youth, inexperience, and ignorance of the land's value, demonstrate a lack of fairness and equality in the transaction. The consideration was 'enormously inadequate,' being at least four times less than the property's true value, an inequality so 'strong, gross and manifest' that it shocks the conscience. The court distinguishes between its reluctance to set aside a fully executed contract and its greater willingness to refuse enforcement of an executory one that constitutes a 'hard bargain.' Because enforcing this unconscionable contract would be unjust, the court will not lend its aid and will instead leave the complainant to his remedy at law to sue for damages.
Analysis:
This case solidifies the principle that specific performance is an extraordinary and discretionary equitable remedy, not an absolute right. It establishes that gross inadequacy of consideration, on its own, can serve as a defense against a suit for specific performance by demonstrating that the contract is unconscionable or a 'hard bargain.' This decision highlights the distinction between a contract's legal validity (which allows for a remedy of damages at law) and its equitable enforceability, setting a higher standard of fairness for parties seeking the court's aid in compelling performance.
