Campbell Soup Co. v. Wentz
172 F.2d 80 (1948)
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Rule of Law:
A court of equity will not grant specific performance for a contract if it deems the agreement to be unconscionable or an excessively hard bargain, even if the legal remedy is inadequate.
Facts:
- On June 21, 1947, Campbell Soup Company entered into a written contract with George and Harry Wentz, Pennsylvania farmers, to purchase all Chantenay red cored carrots grown on fifteen acres of the Wentz farm.
- The contract set the price for the carrots at $23 to $30 per ton, depending on the delivery date.
- The Wentzes harvested approximately 100 tons of carrots from the specified acreage.
- By January 1948, the market price for these specific carrots had risen dramatically to at least $90 per ton, and they were virtually unobtainable on the open market.
- In early January 1948, the Wentzes informed a Campbell representative that they would not deliver the carrots at the agreed-upon contract price.
- The Wentzes then sold approximately 62 tons of their carrots to a neighboring farmer, Lojeski, who in turn began reselling them on the open market.
Procedural Posture:
- Campbell Soup Company instituted suits in the U.S. District Court against the Wentz brothers and Lojeski.
- Campbell sought an injunction to prevent further sale of the carrots and an order for specific performance of the contract.
- The trial court denied equitable relief to Campbell.
- Campbell Soup Company appealed the District Court's judgment to the U.S. Court of Appeals for the Third Circuit.
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Issue:
Does a court of equity have to grant specific performance for a contract involving unique goods if the overall terms of the contract are so one-sided and oppressive as to be unconscionable?
Opinions:
Majority - Goodrich, Circuit Judge
No. A court of equity is not required to grant specific performance for a contract if its terms are unconscionable. Although the carrots are unique goods for which a legal remedy would normally be inadequate, warranting specific performance, the contract itself is too one-sided to be enforced by a court of conscience. The court found that while the goods were unique and unavailable on the open market, making damages an inadequate remedy, the contract was 'too hard a bargain and too one-sided an agreement to entitle the plaintiff to relief in a court of conscience.' The court pointed to several oppressive, non-reciprocal clauses, particularly one that excused Campbell from accepting carrots under certain circumstances but simultaneously prohibited the growers from selling those carrots elsewhere without Campbell's permission. The 'sum total' of these provisions drove too hard a bargain, precluding the equitable remedy of specific performance.
Analysis:
This case is a landmark decision in contract law, illustrating the doctrine of unconscionability as a defense against specific performance. It establishes that even when all the traditional requirements for specific performance are met (e.g., unique goods, inadequate legal remedy), a court can refuse to grant this equitable relief if the underlying contract is fundamentally unfair. This principle empowers courts to look beyond the formal elements of a contract and examine its substantive fairness, a concept later codified in the Uniform Commercial Code (UCC § 2-302). The decision serves as a caution to parties with superior bargaining power that overreaching in drafting contracts can render them unenforceable in equity.
