Legal Case Summary
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 2 WLR 898
Contract law – Specific performance – Covenants
Facts
The plaintiffs granted a lease to the defendant for the use of a unit in a shopping centre for the period of thirty-five years. A clause in the lease required a covenant to keep the premises open for trade during regular business hours in the local area. The premises were used as a supermarket and happened to be the biggest attraction in the shopping centre. The defendants subsequently reviewed their business and closed 27 of their supermarkets, with this particular supermarket being one of those. The plaintiffs allowed the defendants to remain in the marketplace, offering a concession on the rent but without response, the defendant closed the supermarket accordingly. The plaintiff brought an action seeking specific performance and/or damages. The judge found in favour for damages but rejected specific performance. The plaintiffs appealed and the Court of Appeal ordered specific performance. The defendants appealed.
Issue
The issue for the court was whether the clause in the contract was specific enough to enable the plaintiff to enforce specific performance of the contract by the defendant. Specifically, it was important for the court to consider the position of the parties if they found specific performance possible.
Decision / Outcome
The House of Lords allowed the appeal on the basis that the defendant would likely suffer greater loss by being forced to perform the contract than the plaintiff would if the defendant did not carry out the contract as agreed. This would place the plaintiff in an unfair bargaining position. Moreover, the clause in the agreement was not specific enough to be capable of specific performance.
Updated 19 March 2026
This case summary remains legally accurate. Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (also reported at [1997] 2 WLR 898) is a leading House of Lords authority on the principles governing specific performance of contractual obligations, and those principles remain good law. The decision continues to be applied by English courts and is regularly cited in contract law proceedings and academic commentary. No subsequent legislation or appellate authority has overturned or materially qualified the reasoning. One minor point of presentation: the article describes the remedy refused as specific performance on the ground that the clause was insufficiently certain, but readers should note that Lord Hoffmann’s leading judgment treated the primary reason for refusing specific performance as the established rule against ordering a party to carry on a business (which would require constant court supervision and would expose the defendant to contempt proceedings), with certainty being a secondary consideration. The article’s summary is broadly correct but somewhat simplifies the court’s reasoning on this point.
