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Difficulty of Proving Damages with Reasonable Certainty One factor in assessing the adequacy of money damages is the difficulty of proving damages with reasonable certainty. To the extent the buyer simply cannot prove the scope of monetary damages with reasonable certainty, specific performance may well be appropriate. [ See Restatement (Second) of Contracts § 360(a), cmt. a.] Example : A steel manufacturer contracted to sell, to a distributor, all of the manufacturer’s steel output over the ensuing five years. One year into the agreement, the manufacturer repudiated the contract. The distributor sued for specific performance. Here, it may be very difficult to predict the manufacturer’s precise output over the remaining four years of the agreement, as that output could vary with any number of factors. Here, then, specific performance may well be appropriate. [ See Restatement (Second) of Contracts § 360, illustration 4.] Difficulty of Obtaining Substitute Performance via Money Awarded as Damages Another factor in assessing the adequacy of money damages is the difficulty of obtaining substitute performance by money damages. In the context of the buyer’s remedy of specific performance, this factor is another way of saying that the inability to cover is a strong indication that the buyer is entitled to specific performance. [ See Restatement (Second) of Contracts § 360(b); Other Proper Circumstances, supra .] Example : A farmer contracted to sell 10,000 bales of cotton to a supplier. On the day set for delivery, the farmer repudiated the contract. The supplier obtained comparable substitute cotton on the open market for a moderately higher price than that called for under the contract. The supplier is not entitled to specific performance. The remedy of cover is adequate here. The supplier got the cotton it needed, and the excess of the cover price over the contract price is compensable through cover damages. [ Adapted from Restatement (Second) of Contracts § 360, illustration 6.] Likelihood That a Damages Award Could Not Be Collected Still another factor in assessing the adequacy of money damages is the likelihood that a damages award could not be collected. Thus, even if money damages are reasonably certain, specific performance may be appropriate if money damages could not be collected through judgment and execution—for instance, if the seller is insolvent. [ See Restatement (Second) of Contracts § 360, cmt. d.]
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