Equitable Delay Expenses Incident to Specific Performance in Texas Real Estate Contracts: Commentary on White Knight Development, LLC v. Simmons

Equitable Delay Expenses Incident to Specific Performance in Texas Real Estate Contracts: Commentary on White Knight Development, LLC v. Simmons

I. Introduction

The Supreme Court of Texas’s decision in White Knight Development, LLC v. Dick B. Simmons, Sr. and Julie M. Simmons clarifies a long-muddled question in Texas contract and real estate law: when, if ever, may a court award specific performance of a real estate contract and a monetary award in the same judgment?

Historically, Texas cases have repeated that specific performance is “an equitable alternative” to legal damages. Yet, courts of appeals had also been quietly allowing monetary awards “incident to” specific performance in certain real‑estate cases, particularly to compensate for delay between the contract date and the date of judicial enforcement. This opinion harmonizes those strands and sets out a structured test for such awards.

The Court holds that, in a narrow class of real‑estate cases, a trial court may both:

  • Order specific performance of a real estate contract, and
  • Award equitable monetary compensation for certain delay‑related expenses

provided the money award is tightly limited to reasonable, foreseeable, property‑related expenses directly caused by the breaching party’s delay in performance, and—when the nonbreaching party is effectively the seller still holding the property—incurred in connection with the “care and custody” of that specific property.

The opinion thus refines Texas law on:

  • The relationship between equitable remedies and legal damages,
  • The proper scope of monetary relief incident to specific performance, and
  • How causation, foreseeability, and commercial reasonableness constrain such awards.

II. Summary of the Opinion

The case arises from a 2015 contract for sale of subdivision land in Bryan, Texas. White Knight Development agreed to purchase property from Dick and Julie Simmons for $400,000. Because deed restrictions could impede White Knight’s development plans, the parties amended the contract to include a “buy‑back” option: if the restrictions were reinstated or extended before January 1, 2018, White Knight could require the Simmonses to repurchase the property at the original price (less any unpaid note balance) within 45 days.

After the residents voted in October 2016 to extend the restrictions, White Knight exercised the buy‑back option. The Simmonses did not repurchase within the 45‑day period (by December 23, 2017) and refused to do so thereafter. White Knight sued for breach of contract and other claims, seeking:

  • Specific performance of the buy‑back provision (forcing the repurchase), and
  • Various categories of monetary relief, including fees, taxes, interest, and other costs allegedly resulting from the Simmonses’ refusal to repurchase.

The trial court found a breach and ordered specific performance—requiring the Simmonses to repurchase the property for $400,000. It also awarded White Knight $308,136.14 in items it labeled “additional actual damages/consequential damages,” covering:

  • Property taxes and loan‑related expenses “related to” the Simmons property,
  • Property taxes and penalties on other properties,
  • “Operating loan interest” to continue business,
  • Interest on a loan involving another property allegedly needed to avoid foreclosure of the Simmons property, and
  • Credit card interest for White Knight “to continue business.”

On appeal, the Tenth Court of Appeals (Waco) agreed that, in theory, some monetary award may accompany specific performance in “narrow circumstances.” But because the trial court characterized the award as “actual/consequential damages” and did not expressly label it “equitable,” the court of appeals struck the entire $308,136.14 and affirmed specific performance only.

The Texas Supreme Court:

  • Affirms that specific performance and legal damages are alternate remedies.
  • But holds there is a narrow category of equitable monetary awards that may accompany specific performance in contracts for the sale of real property.
  • Rejects the court of appeals’ categorical invalidation of the entire monetary award based on labels alone.
  • Articulates a precise test limiting equitable monetary awards incident to specific performance.
  • Reverses in part and remands to the court of appeals to separate recoverable from unrecoverable items under the new standard.

III. Factual and Procedural Background

A. The Transaction and Buy‑Back Provision

In 2015, White Knight agreed to purchase subdivision land in Bryan for $400,000 from the Simmonses. The subdivision was subject to deed restrictions, including setback requirements, set to remain in effect until January 1, 2016, but subject to further extension by resident vote through January 1, 2018.

Concerned that extended restrictions would undermine its development plans, White Knight negotiated a contract amendment containing a “buy‑back” option:

If any of the restriction concerns are reinstated at any time prior to January 1, 2018, Buyer has the option (but not the obligation) to demand that Seller repurchase the Property… Seller shall be required to repurchase the Property for the original purchase price, less unpaid note balance, within 45 days after the buy‑back is demanded.

The sale closed in May 2016. White Knight paid the $400,000 purchase price and received a deed.

B. Triggering of the Buy‑Back and Alleged Breach

In October 2016, subdivision residents voted to extend the restrictions, triggering the condition for White Knight’s buy‑back option. White Knight timely invoked the buy‑back provision and gave the Simmonses until December 23, 2017 (45 days) to repurchase the property.

The Simmonses did not repurchase. They argued the restrictions had expired and that the conditions necessary to trigger their buy‑back obligation had not occurred. They refused to perform.

C. White Knight’s Financing Problems and Claimed Losses

White Knight financed the original purchase with a loan from MidSouth Bank. When the Simmonses refused to repurchase:

  • White Knight defaulted on the MidSouth loan, then paid a forbearance fee to avoid foreclosure.
  • It obtained a second loan, securing both the Simmons property and an unrelated property as collateral, to pay off MidSouth.
  • After defaulting on the second loan, White Knight took a third loan to refinance the unrelated property and retire the debt on the Simmons property.
  • It ultimately transferred title to the unrelated property to the second lender to avoid foreclosure.
  • Throughout, White Knight paid property taxes and loan interest with a company credit card and incurred credit‑card interest.

Evidence showed that White Knight’s business effectively collapsed under these financial stresses.

D. Trial Court Judgment

The case was tried to the bench. The trial court:

  • Found that the Simmonses breached the contract by refusing to honor the buy‑back provision.
  • Applied quasi‑estoppel to preclude the Simmonses from denying the validity of the restrictions.
  • Ordered specific performance: the Simmonses must repurchase the property for $400,000.
  • Awarded $308,136.14 in “additional actual damages/consequential damages” for a period spanning roughly 3½ years (from breach on December 23, 2017, to trial).

The categories of the $308,136.14 award included:

  1. $103,667.73 in expenses “related to” the Simmons property, including:
    • Property taxes on the Simmons property,
    • Forbearance and refinancing fees,
    • Interest on the MidSouth loan, and
    • Interest on subsequent loans incurred to avoid default on the MidSouth loan.
  2. $45,619.83 in 2020 property taxes:
    • $4,862.23 on the Simmons property,
    • The remainder on other properties.
  3. $8,211.57 in penalties on past‑due 2020 property taxes:
    • $875.20 relating to the Simmons property,
    • The remainder relating to other properties.
  4. $59,318.00 in “operating loan interest” for White Knight “to continue business.”
  5. $74,802.00 in “loan interest related to another property that had to be refinanced to avoid foreclosure of” the Simmons property.
  6. $16,518.00 in “credit card interest” for White Knight to “continue business.”

The court found that the breach caused White Knight to extend financing, pay a forbearance fee, acquire additional loans, damage its credit, and incur “significant additional expenses due to other projects that were not able to be completed.”

E. Court of Appeals’ Decision

On appeal:

  • White Knight challenged the failure to find in its favor on fraud (not directly relevant to this opinion’s holding).
  • The Simmonses challenged the quasi‑estoppel finding and the simultaneous awards of specific performance and monetary damages, among other things.

The court of appeals modified the judgment to delete the $308,136.14 monetary award and affirmed in all other respects. It recognized that some monetary awards can accompany specific performance “in narrow circumstances,” but concluded that:

  • The trial court did not label the award as equitable or as an “adjustment of the equities,” and
  • There was no indication in the findings or judgment that the amounts awarded were intended to put the parties in the position they would have occupied had the transaction closed as contemplated.

On that basis, it held White Knight could not “receive relief in the form of specific performance of the contract and then also receive damages for its breach” and struck the entire award.

F. Supreme Court’s Review

The Supreme Court granted White Knight’s petition for review limited to the monetary‑relief issue. The Simmonses did not seek review, so issues such as quasi‑estoppel and the validity of restrictions were not before the Court.

The Court:

  • Clarified that, although damages and specific performance are ordinarily alternative remedies, a limited equitable monetary award may accompany specific performance in real estate cases.
  • Held the court of appeals erred by deleting the entire monetary award solely because of its “actual/consequential damages” label and lack of explicit “equitable” language.
  • Announced a three‑part test, plus a property‑care requirement, for determining which expense categories may be awarded.
  • Reversed in part and remanded for the court of appeals to perform a category‑by‑category analysis under that standard.

IV. The New Rule on Monetary Awards Incident to Specific Performance

The core doctrinal contribution of White Knight is a clear articulation of when a Texas court may combine specific performance with an accompanying money award in a real estate contract dispute.

A. Traditional Rule Reaffirmed

The Court reaffirms that:

  • Specific performance is an equitable remedy for breach of contract, not a standalone cause of action.
  • Damages and specific performance are ordinarily alternative remedies, not cumulative.
  • A plaintiff must elect one or the other as its primary remedy for breach.

When a party chooses legal damages, it treats the contract as terminated and seeks compensation for the breach. When a party chooses specific performance, it affirms the contract and asks the court to enforce it as written.

B. The “Narrow Circumstances” for Combined Relief

The Court then carves out a narrow, well‑defined exception for contracts for the sale of real property:

[T]here is a narrow set of circumstances in which a breach of a contract for the sale of real property may be remedied by specific performance and a monetary award of reasonable, foreseeable expenses directly traceable to the delay in performance and, in cases where the purchaser breaches, incurred in connection with the seller's care and custody of the property during such delay.

Key points:

  • The award is equitable, not legal damages.
  • Its function is to restore the nonbreaching party to the position it would have occupied had performance occurred on time.
  • It compensates only for expenses that arise because of the delay between when performance was due and when judgment is rendered.
  • It does not allow a double recovery or to place the plaintiff in a better position than if the contract had been timely performed.

C. The Three‑Part Test (Plus Property‑Care Limitation)

The Court distills prior appellate practice and general principles into a specific test. Each category of expense awarded alongside specific performance must:

  1. Be directly traceable to the defendant’s delay in performance.
    The expense must be caused by the breach and the ensuing delay, not something the nonbreaching party would have incurred anyway.
  2. Have been foreseeable at the time of contracting.
    It must be the type of expense that, at the time the parties made their contract, it was reasonably in their contemplation that the nonbreaching party might incur if there was a delay or failure to perform.
  3. Be commercially reasonable.
    The expense must be fair, moderate, and typical in the context of managing and preserving the property, not extravagant or speculative.

And when the nonbreaching party is in the role of a seller in possession (as White Knight effectively was after exercising the buy‑back option), an additional limitation applies:

  • The expenses must be incurred in connection with the care and custody of the particular property in dispute.

Examples of expenses that often fit this mold:

  • Property taxes on the subject property that had to be paid during the delay.
  • Insurance, security, and basic maintenance necessary to preserve the property.
  • Interest and reasonable fees on financing that had to be carried longer solely due to the buyer’s refusal or delay in closing (when that structure is foreseeable at contracting).

Conversely, expenses that are typically outside the rule include:

  • Taxes, penalties, or costs on other properties not subject to the specific performance decree.
  • General “operating” debt or credit card interest incurred to continue a wider business.
  • Loan costs or opportunity losses only tenuously connected to the property or the breach.
  • Expenses incurred before the breach (i.e., before performance was due).

V. Precedents and Authorities Cited

A. Specific Performance as an Alternative Remedy

The Court anchors its analysis in well‑established Texas authority:

  • Pathfinder Oil & Gas, Inc. v. Great Western Drilling, Ltd., 574 S.W.3d 882 (Tex. 2019)
    Confirming specific performance as an equitable remedy for breach of contract.
  • Hays Street Bridge Restoration Group v. City of San Antonio, 570 S.W.3d 697 (Tex. 2019)
    Explicitly recognizing that “damages and specific performance are alternatives to one another.”
  • Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011)
    Holding that specific performance is foreclosed when an adequate remedy at law exists.
  • Goldman v. Olmstead, 414 S.W.3d 346 (Tex. App.—Dallas 2013, pet. denied)
    Explaining that electing damages treats the contract as terminated; electing specific performance affirms the contract and seeks its enforcement.

These cases reinforce the baseline: the legal system typically forces an election between monetary damages and specific performance.

B. Courts of Appeals’ “Delay” Awards

The opinion then synthesizes a line of courts‑of‑appeals cases that had already allowed limited monetary awards “incident to” specific performance:

  • Paciwest, Inc. v. Warner Alan Properties, LLC, 266 S.W.3d 559 (Tex. App.—Fort Worth 2008, pet. denied)
    Recognizing that a court “may order, in addition to specific performance, payment of expenses incurred by plaintiffs as a result of a defendant’s late performance.”
  • Heritage Housing Corp. v. Ferguson, 674 S.W.2d 363 (Tex. App.—Dallas 1984, writ ref’d n.r.e.)
    Describing such compensation as a way to “equalize any losses occasioned by the delay by offsetting them with money payments” and to enforce the contract “retrospectively.”
  • Claflin v. Hillock Homes, Inc., 645 S.W.2d 629 (Tex. App.—Austin 1983, writ ref’d n.r.e.)
    Affirming specific performance plus the home builder’s interim financing “carrying charges” between breach and suit when a homebuyer refused to close.
  • Byram v. Scott, No. 03‑07‑00741‑CV, 2009 WL 1896076 (Tex. App.—Austin July 1, 2009, pet. denied)
    Upholding specific performance plus reimbursement of rent paid by a lessee‑buyer during the delay when the seller refused to convey. The court emphasized looking to the “economic substance” of the award.
  • TLC Hospital, LLC v. Pillar Income Asset Management, Inc., 570 S.W.3d 749 (Tex. App.—Tyler 2018, pet. denied)
    Approving “delay damages” such as lost profits and interest differences alongside specific performance (though White Knight implicitly requires careful scrutiny of such categories).
  • Scott Pelley P.C. v. Wynne, No. 05‑15‑01560‑CV, 2017 WL 3699823 (Tex. App.—Dallas Aug. 28, 2017, pet. denied)
    Recognizing the possibility of monetary compensation in addition to specific performance.
  • Foust v. Hanson, 612 S.W.2d 251 (Tex. App.—Beaumont 1981, no writ)
    Earlier recognition of specific performance plus monetary compensation for delay.

Collectively, these cases provided the doctrinal foundation that the Supreme Court ratifies and systematizes.

C. Causation and Foreseeability

The Court borrows general tort and contract principles of causation and foreseeability to limit equitable awards:

  • Stuart v. Bayless, 964 S.W.2d 920 (Tex. 1998)
    Damages must be “directly traceable” to the wrongful act and result from it.
  • Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997)
    Reemphasizing the requirement that losses be directly traceable to the conduct.
  • USX Corp. v. Union Pacific Resources Co., 753 S.W.2d 845 (Tex. App.—Fort Worth 1988, no writ)
    Rejecting recovery for expenses that would have been incurred regardless of the breach.
  • Basic Capital Management, Inc. v. Dynex Commercial, Inc., 348 S.W.3d 894 (Tex. 2011)
    Articulating the classic Hadley v. Baxendale foreseeability rule: damages must be such as may “reasonably be supposed to have been in the contemplation of both parties at the time they made the contract.”
  • American Akaushi Association v. Twinwood Cattle Co., ___ S.W.3d ___, 2025 WL 450750 (Tex. App.—Houston [14th Dist.] Feb. 11, 2025, no pet. h.)
    Quoted for the principle that uncertainty about the amount of damages is permissible, but uncertainty about the fact of damages is fatal.

These authorities give the Supreme Court the tools to say: not all financial setbacks that follow a breach are compensable; only those directly caused by the breach and reasonably foreseeable at the time of contracting qualify.

D. UCC and Treatise Analogies

The opinion relies on non‑Texas sources to support a more general remedial theory:

  • Corbin on Contracts § 63.23
    Recognizes that decrees of specific performance rarely secure performance by the contract deadline, so courts regularly award money for partial breaches caused by delay, alongside specific performance.
  • Restatement (Second) of Contracts § 358 cmt. c
    States that, because specific performance often occurs late, “damages for the delay will usually be appropriate” in addition to equitable relief.
  • Williston on Contracts § 67:32
    Notes that a court in equity may grant monetary compensation in addition to specific performance to provide “full and complete relief.”
  • American Jurisprudence 2d, Specific Performance § 231
    Endorses damages for injury caused by a defendant’s late performance, even when specific performance is ordered.

Most notably, the Court analogizes to the Uniform Commercial Code:

  • UCC § 2.710 (TEX. BUS. & COM. CODE § 2.710)
    Defines a seller’s “incidental damages” upon buyer’s breach as:

    any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer’s breach, in connection with return or resale of the goods or otherwise resulting from the breach.

While the UCC governs goods, not real estate, the Court borrows the concepts of:

  • Expenses incurred after breach,
  • In connection with the seller’s care and custody of the property, and
  • Limited to “commercially reasonable” charges.

These concepts help shape the “care and custody” and “commercial reasonableness” components of the new rule for real estate contracts.

E. Other Jurisdictions

The Court aligns Texas with numerous states that recognize some form of monetary award incident to specific performance of real estate contracts, including Alaska, California, Georgia, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, North Dakota, Ohio, Oregon, Rhode Island, Utah, and Vermont.

This comparative nod bolsters the Court’s confidence that its rule is consistent with mainstream contract doctrine.

VI. The Court’s Legal Reasoning

A. Standards of Review

The Court carefully separates:

  • Legal question (reviewed de novo):
    Is it permissible, as a matter of law, to award monetary relief alongside specific performance in this category of cases?
  • Equitable tailoring (abuse‑of‑discretion review):
    What are the precise contours and amount of any equitable monetary award in a given case?

This reinforces that determining whether such combined relief is conceptually allowed is a law question for the appellate courts, but shaping its scope in a particular case is entrusted to trial court discretion (subject to the constraints the opinion announces).

B. Reconciling the Alternative‑Remedy Rule with Equitable Awards

The central challenge is: how can the Court preserve the rule that “damages and specific performance are alternatives” while permitting some money award alongside specific performance?

The Court’s answer lies in recharacterizing the permissible monetary component:

  • It is not “breach of contract damages” in the ordinary legal sense.
  • It is an equitable adjustment, incidental to specific performance, which enforces the contract retrospectively and corrects for the inevitable delay in performance.
  • It is more limited than general contract damages and does not duplicate recovery.

Thus, the Court insists that this equitable award:

  • Does not undermine the election‑of‑remedies rule.
  • Does not violate the one‑satisfaction rule (a plaintiff can recover only once for a particular injury).
  • Serves only to put the nonbreaching party “as nearly as possible” in the position it would have occupied if performance had been timely.

C. Application of Causation and Foreseeability

The Court lays down concrete boundaries:

  1. No pre‑breach expenses.
    Expenses incurred before performance was due—even if related to the same property—are not caused by the breach and fall outside the equitable award. For example, taxes or interest incurred before the repurchase deadline are unrecoverable.
  2. Foreseeability at contracting.
    The “type” or category of expense must have been foreseeable when the contract was made. The exact amount need not be known, but the general nature must have been within the parties’ contemplation.
  3. Direct traceability.
    Expenses that would have been incurred anyway, regardless of breach or delay, are excluded.

Applied to this case, it is foreseeable that, if the Simmonses refused to repurchase, White Knight would have to pay:

  • Ongoing property taxes on the Simmons property, and
  • Reasonable financing costs associated with continuing to carry the property until repurchase.

By contrast, it is not reasonably foreseeable that the refusal to repurchase would cause:

  • Property taxes and penalties on entirely different properties,
  • General operating loan interest to “continue business,” or
  • Credit card interest used to keep the company afloat.

D. The “Care and Custody” and “Commercial Reasonableness” Requirements

By invoking UCC § 2.710 and older Texas cattle cases, the Court stresses that recoverable expenses for a nonbreaching seller must be analogous to:

  • Feeding, watering, and caring for cattle left with the seller after buyers repudiated,
  • Basic carrying costs for goods held for resale, or
  • Reasonable interest and charges to keep property financed until the buyer finally closes.

“Commercial reasonableness” here means:

  • The expense is objectively fair and proportionate under market conditions.
  • The nonbreaching party took steps that a prudent businessperson would take to protect the property.
  • The expense was necessary or appropriate in managing and preserving the property pending performance.

E. Evaluating the Trial Court’s Award in White Knight

The Supreme Court does not parse each dollar of the $308,136.14 award. Instead, it:

  • Rejects the court of appeals’ all‑or‑nothing approach.
  • Holds that some portion of the award is legally permissible as an equitable delay award.
  • Remands for the court of appeals to separate recoverable from unrecoverable items under the articulated test.

However, the Court gives clear guidance implying which categories are likely to survive:

  • Potentially recoverable:
    • Post‑breach property taxes on the Simmons property.
    • Forbearance fees and reasonable interest on loans directly tied to keeping the Simmons property from foreclosure during the delay.
  • Likely unrecoverable:
    • Taxes and penalties on other properties.
    • “Operating loan interest” and “credit card interest” expended to “continue business,” not specifically to carry the Simmons property.
    • Loan interest tied primarily to another property, unless clearly and directly necessary to preserve the Simmons property and foreseeable at contracting.
    • Any pre‑breach taxes or interest.

The instruction is clear: trial and appellate courts must examine the economic substance of each category of expense, not simply labels like “actual damages,” and must test them against causation, foreseeability, commercial reasonableness, and the “care and custody of the property” limitation.

VII. Complex Concepts Simplified

A. Specific Performance vs. Legal Damages

In contract law:

  • Legal damages are money awards meant to compensate a party for losses caused by a breach. If you choose damages, you are effectively saying, “We won’t complete the contract; pay me for what your breach cost me.”
  • Specific performance is a court order requiring the breaching party to do what it promised—for example, convey a piece of land or buy back property. If you choose specific performance, you are saying, “I want the contract enforced as written; I still want the deal itself.”

Texas typically makes you choose one route: money or forced performance. White Knight explains that in real estate, you can sometimes get specific performance plus a narrowly tailored money amount, but only to correct for the delay in performance—not to collect a second full set of damages.

B. Equitable Monetary Award “Incident to” Specific Performance

An equitable monetary award incident to specific performance is:

  • A money award that goes along with a court order enforcing the contract,
  • Intended to cover losses caused by the fact that performance happened late, and
  • Carefully limited so it does not duplicate what you would have gotten if you had simply sued for full breach‑of‑contract damages instead.

Think of it as the court saying: “I am forcing the other side to perform as though they had done so on time. But because they didn’t, you had to pay some extra carrying costs. I will reimburse you only for those delay‑related, property‑specific costs.”

C. Foreseeability

Foreseeability is a fairness limit on what the breaching party must pay for. At the time of contracting:

  • If a certain type of loss would reasonably be expected to follow from a breach, it is foreseeable and may be compensable.
  • If a loss is remote, unusual, or depends on special circumstances the other side did not know, it is typically not foreseeable and not compensable.

In White Knight:

  • It is foreseeable that, if the seller refuses to repurchase the land, the other side will have to keep paying taxes and some financing costs on that land.
  • It is less foreseeable that the refusal would trigger a chain reaction leading to tax penalties on other properties, general operating loan interest, and business collapse.

D. Commercial Reasonableness and “Care and Custody”

Commercial reasonableness means that, in context, the expense is the sort of amount and kind a prudent businessperson would incur. It rejects:

  • Excessive, unnecessary, or speculative expenditures.
  • Artificially inflated charges (e.g., charging yourself a “hypothetical” rent for your own property).

Care and custody of the property refers to the basic actions and costs necessary to maintain and preserve the property while you are forced to hold it due to the other party’s breach—like taxes, insurance, utilities to keep pipes from freezing, or necessary loan interest when the property is the collateral.

E. Quasi‑Estoppel (Background Only)

The trial court relied on quasi‑estoppel to preclude the Simmonses from denying the validity of the restrictions after having previously acted in a way inconsistent with that position. Quasi‑estoppel generally prevents a party from taking a legal position inconsistent with its prior conduct or benefits accepted where it would be unconscionable to allow the change.

Although important to the liability finding, quasi‑estoppel was not before the Supreme Court because the Simmonses did not petition for review. It remains part of the trial court’s unchallenged basis for finding a breach, but it does not shape the remedial rule announced in this opinion.

VIII. Impact and Future Implications

A. Guidance for Trial Courts

Trial courts now have clear instructions:

  1. Do not reject combined relief on labels alone.
    The key is the substance of the award, not whether the judgment calls it “damages” or “equitable compensation.” Courts must examine:
    • What the expenses are,
    • When they were incurred, and
    • How they relate to the breach and the property.
  2. Itemize and categorize.
    To facilitate review, trial courts should:
    • Break out each category of expense,
    • Find when each category accrued, and
    • State whether it relates to the subject property’s care and custody or to broader business operations.
  3. Apply the three‑part test plus property‑care requirement.
    For each category, courts must determine:
    • Is it directly caused by delay?
    • Was it foreseeable at contracting?
    • Is it commercially reasonable?
    • If the nonbreaching party is in possession, is it tied to the care and custody of the subject property?
  4. Be explicit in findings of fact.
    Detailed findings tying each awarded category to these elements will reduce reversals and clarify the equitable basis for the award.

B. Implications for Lawyers and Parties

For transactional lawyers and litigators, White Knight suggests several practical points.

1. Contract Drafting

  • Parties can explicitly allocate delay costs in buy‑sell or buy‑back provisions—for example, specifying who pays taxes, maintenance, insurance, and financing charges if closing or repurchase is delayed.
  • In option or buy‑back deals, counsel should anticipate the possibility of forced repurchase with equitable delay compensation and draft accordingly.
  • Sophisticated parties may choose to waive or cap incidental expenses incident to specific performance, or to state that “each party bears its own carrying costs,” though Texas law may impose baseline equitable constraints.

2. Litigation Strategy and Proof

  • Plaintiffs seeking specific performance should plead for equitable monetary relief incident to specific performance, not only legal damages.
  • They should maintain detailed records segregating:
    • Expenses on the subject property (taxes, insurance, loan interest tied to that property), and
    • Broader business or portfolio expenses.
  • Expert testimony may be helpful to prove:
    • Commercial reasonableness of certain carrying costs, and
    • Foreseeability and standard practice at the time of contracting.

3. Election of Remedies

The decision reinforces that:

  • A plaintiff electing specific performance cannot also obtain full breach‑of‑contract damages (e.g., lost profits, full consequential damages on lost projects).
  • Instead, the plaintiff may obtain:
    • Specific performance of the contract (e.g., forced closing or repurchase), and
    • A narrow equitable award to offset delay‑related property‑specific expenses.

C. Types of Cases Likely to Be Affected

The principle will be especially relevant in:

  • Residential and commercial real estate sale contracts where one party refuses to close.
  • Contracts with options or buy‑back provisions (like this case), where the original buyer later stands in the shoes of a seller.
  • Disputes where:
    • The nonbreaching party remains in possession for a substantial time due to the other side’s breach, and
    • Specific performance is ultimately decreed.

The Court expressly reserves the possibility of refining this rule in “cases involving different facts” and indicates that it may not apply identically in all non‑real‑estate contexts.

D. Open Questions and Future Litigation

The opinion leaves several issues open for future cases:

  • Scope of recoverable financing costs.
    How far can courts go in awarding interest and fees on complex refinancing structures, particularly when multiple properties secure the same loans?
  • Lost use, lost rent, or lost profits.
    The Court does not definitively resolve whether lost rent or similar opportunity costs may ever be part of equitable delay awards; some courts of appeals have allowed such items, but White Knight emphasizes a tight causal and foreseeability nexus.
  • Non‑real‑estate contracts.
    The opinion is carefully framed around “contracts for the sale of real property.” Whether analogous rules apply to other long‑lived assets (e.g., unique equipment or businesses) remains to be developed.
  • Overlap with prejudgment interest.
    How these equitable delay awards interact with statutory or common‑law prejudgment interest is not explored in detail, and future courts will need to avoid double‑counting time‑value‑of‑money components.
  • Mitigation duties.
    While inherent in “commercial reasonableness,” the precise scope of the nonbreaching party’s duty to mitigate delay‑related expenses will likely attract attention in future disputes.

IX. Conclusion

White Knight Development, LLC v. Simmons is a significant refinement of Texas remedies law in the real estate context. The Court:

  • Reaffirms that specific performance is generally an alternative to legal damages, preserving the core election‑of‑remedies and one‑satisfaction principles.
  • Recognizes, and cabins, a longstanding but under‑articulated practice of awarding monetary relief “incident to” specific performance when necessary to adjust the equities.
  • Announces a clear test: each category of expense awarded alongside specific performance must be directly traceable to the delay, foreseeable when the contract was made, commercially reasonable, and (where the nonbreaching party is in possession) incurred in connection with the care and custody of the specific property at issue.
  • Rejects a formalistic approach that turns solely on whether trial courts label amounts “damages” or “equitable,” and instead demands an examination of the economic substance of each item claimed.

By aligning Texas with the Restatement, leading treatises, and numerous sister states, the Court gives both trial courts and practitioners a coherent framework for addressing the frequent reality that specific performance, when granted, often comes late. Going forward, parties to Texas real estate contracts can expect that:

  • Specific performance will remain available where monetary damages are inadequate, and
  • In appropriate, narrowly defined circumstances, courts may also award modest, property‑specific equitable compensation to ensure that delayed performance does not leave the nonbreaching party worse off than if the contract had been honored on time.

This decision thus strengthens the predictability and fairness of remedies in Texas real estate transactions, while guarding against overbroad or duplicative recovery.

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