## Facts

- Ace Equipment Co., Inc. (Ace) sent Aqua Chem, Inc. (Aqua Chem) a written offer to purchase a used 6000 KVA General Electric transformer for $1,800.
- Aqua Chem accepted Ace’s offer in writing, forming a contract for sale of the transformer.
- After Aqua Chem’s acceptance, Ace entered into a separate contract to sell the transformer to Frank Lunney for $7,500.
- Ace arranged for pickup and delivery and supplied a truck for transport.
- The transformer was loaded onto Ace’s truck for delivery, but Aqua Chem refused to allow the truck to leave and kept possession of the transformer.
- Ace alleged Aqua Chem’s refusal was wrongful and occurred without prior notice.
- Ace filed a complaint in equity seeking specific performance (delivery of the transformer), alleging it was obligated to deliver to Lunney and faced consequential damages if it could not perform its resale contract.
- Aqua Chem filed preliminary objections, arguing Ace had a complete and adequate remedy at law in money damages and therefore could not proceed in equity.

## Issues

1. Whether Ace’s complaint in equity stated a basis for specific performance under U.C.C. § 2-716 where the buyer had a resale contract and claimed potential consequential damages, or whether the existence of a damages remedy barred equitable relief at the pleading stage.

## Decision

- The court overruled Aqua Chem’s preliminary objections.
- The court permitted Ace to proceed in equity on its request for specific performance.
- The court reasoned that, on the pleaded facts, it could not conclude Ace’s remedy at law would be complete and adequate, given Ace’s downstream contractual obligations and claimed exposure to consequential damages.

## Legal Principles

- U.C.C. § 2-716 allows specific performance “where the goods are unique or in other proper circumstances.”
- The availability of a damages remedy does not automatically bar equitable relief; the question is whether damages will fully compensate the buyer in the circumstances shown.
- “Other proper circumstances” may exist when the buyer plausibly alleges that cover is not reasonably available or that damages would not fairly address the buyer’s situation, including risks tied to the buyer’s obligation to perform a contract with a third party.
- On preliminary objections, a court generally assesses whether the complaint pleads facts that could justify equitable relief; it need not decide the final merits of specific performance.

## Conclusion

Ace Equipment Co., Inc. v. Aqua Chem, Inc. holds that a buyer seeking delivery of contracted-for goods may proceed with an equity action for specific performance under U.C.C. § 2-716 when the complaint alleges circumstances—such as a binding resale contract and potential consequential damages from nonperformance—suggesting money damages may not be a complete remedy, so the seller’s preliminary objections based solely on the existence of a legal remedy should be denied.


Ace Equipment Co., Inc. v. Aqua Chem, Inc., 20 U.C.C. Rep. Serv. 392 (1975)