Tower City Grain Co. v. Richman
17 U.C.C. Rep. Serv. (West) 1011, 232 N.W.2d 61 (1975)
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Rule of Law:
Under UCC § 2-716, specific performance is not an appropriate remedy for a contract for the sale of fungible goods unless the party seeking it demonstrates the existence of 'unique goods' or 'other proper circumstances,' which requires a clear showing that the legal remedy of money damages is inadequate.
Facts:
- The Richmans, a family of farmers, entered into an oral contract to sell 10,000 bushels of wheat to Tower City Grain Company.
- The contract did not set a specific delivery date, stating only that delivery would occur upon the availability of storage or rail transportation at Tower City Grain's elevator.
- Throughout the spring and summer of 1973, the Richmans repeatedly inquired about when they could deliver the grain.
- On each occasion, Tower City Grain informed the Richmans that its elevator was full or that no boxcars were available for shipment.
- During this same period, Tower City Grain was accepting grain deliveries from other farmers.
- Tower City Grain eventually called for delivery several months after the contract was formed, with the parties disputing whether the call was made in July or as late as September.
- Believing the long delay constituted a breach of contract, the Richmans refused to deliver the wheat.
- The Richmans retained possession of the 10,000 bushels of wheat that were the subject of the contract.
Procedural Posture:
- Tower City Grain Company sued E. W. Richman & Sons in the district court of Barnes County, seeking specific performance of an oral contract.
- After a trial, the district court (court of first instance) rendered a judgment in favor of Tower City Grain, ordering the Richmans to specifically perform the contract.
- The Richmans (appellants) appealed the district court's judgment to the Supreme Court of North Dakota.
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Issue:
Under UCC § 2-716, is specific performance an appropriate remedy for the breach of a contract for the sale of fungible goods when the party seeking the remedy has not established that money damages would be inadequate?
Opinions:
Majority - Pederson, Judge
No. Specific performance is not an appropriate remedy for the breach of a contract for the sale of fungible goods unless the party seeking it establishes the existence of 'other proper circumstances,' which requires a clear showing that the legal remedy of damages is inadequate. Although the Uniform Commercial Code (UCC) liberalized the use of specific performance, it did not eliminate the fundamental requirement that this equitable remedy is only available when the legal remedy of damages is insufficient. A complaint seeking specific performance must clearly demonstrate this inadequacy. In this case, the trial court made no finding that damages were inadequate or that any 'proper circumstances' existed to justify the extraordinary remedy. The mere facts that the buyer prayed for specific performance and the seller still possessed the grain are not sufficient to support a decree of specific performance for common, fungible goods like wheat. Therefore, granting specific performance was a manifest abuse of discretion and an error of law.
Analysis:
This case clarifies the application of UCC § 2-716's 'other proper circumstances' clause for contracts involving fungible goods. It establishes that while the UCC encourages a more liberal attitude towards specific performance, it does not make it a standard remedy for breach in the sale of common commercial goods. The decision reinforces that specific performance remains an extraordinary equitable remedy, requiring the party seeking it to affirmatively prove that money damages are inadequate. This precedent tempers the expansion of specific performance, maintaining the traditional hierarchy where damages are the default remedy unless special circumstances, proven on the record, justify court-ordered performance.
