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Zwirner , 713 F.Supp.2d 367 (S.D.N.Y. 2010); Sherwin Alumina L.P. v. AluChem, Inc. , 512 F.Supp.2d 957 (S.D. Tex. 2007).]
Example : A chemical manufacturer contracted to sell calcined, chemical-grade alumina to a distributor over a period of years. The parties performed as agreed for several years, renewing the contract multiple times. But even after the manufacturer repudiated the contract by insisting on higher prices, the distributor kept buying alumina from the manufacturer. The market for this type of alumina was extremely tight, as worldwide shortages plagued the industry. Only a handful of entities produced the alumina, and the distributor sorely needed the alumina to continue operating its business. The parties’ relationship eventually broke down, and the distributor sued the manufacturer for, among other things, specific performance. On similar facts, a federal district court held that the plaintiff was entitled to specific performance. Though the alumina may not have been literally unique, it was scarce enough, and crucial enough to the buyer, that specific performance was warranted under Article 2. [ Adapted from Sherwin Alumina L.P. v. AluChem, Inc. , 512 F.Supp.2d 957 (S.D. Tex. 2007).] b. Other Proper Circumstances Neither § 2-716 nor its official comments articulate a precise definition for other proper circumstances, besides the goods’ uniqueness, when the court may award specific performance. However, the buyer’s inability to cover is strong evidence of other proper circumstances. Inability to cover generally refers to inability to obtain suitable replacement goods—often the case when the goods are unique or scarce, resulting in some (but not total) overlap between the two prongs of Article 2’s test for specific performance. Other proper circumstances may also exist if money damages would not afford an adequate remedy. [U.C.C. § 2-716, cmt. 2 (1951); Discretionary Nature of Specific Performance, infra .] c. Discretionary Nature of Specific Performance Even if the requirements for specific performance are met, the court has discretion to deny the remedy. Courts often deny specific performance if money damages would be adequate to compensate the plaintiff. Even here, adequacy is a relative concept, and courts may award specific performance if it would serve the ends of justice more effectively than money damages would. Courts consider three factors in determining whether damages are adequate. [U.C.C. § 2-716, cmt. 1 (1951); 2 Hawkland UCC Series § 2-716:1, Westlaw (database updated June 2021); Restatement (Second) of Contracts § 359, cmt. a.]
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