## Facts

- CMA CGM, S.A. (CMA) leased 7,271 shipping containers from Waterfront Container Leasing Company, Inc. (Waterfront).
- The lease contract gave CMA an option to purchase the containers at the end of the lease term at an agreed price, as long as CMA followed the contract’s option procedures.
- CMA gave Waterfront notice that it wanted to exercise the purchase option in the manner required by the contract.
- Waterfront refused to allow CMA to purchase the containers, denying the option in breach of the contract.
- Over the following months, CMA began returning containers to Waterfront, and Waterfront sold returned containers to new customers.
- CMA sued Waterfront for breach of contract and sought specific performance of the purchase option.
- The parties filed cross-motions for summary judgment.
- At the time of the motions, CMA still possessed more than 3,000 containers and argued that specific performance was the most workable remedy.
- Waterfront argued specific performance was improper because CMA could buy replacement containers from another seller and recover the price difference as damages.
- The parties agreed that without specific performance it would take CMA about six months to return the remaining containers, and Waterfront would need to sell those containers before damages could be determined.

## Issues

1. Did CMA validly exercise the contract’s purchase option, making Waterfront’s refusal to sell a breach of contract?
2. If Waterfront breached, was specific performance an available remedy under U.C.C. § 2-716 based on the circumstances, even though shipping containers are generally not unique goods and CMA could theoretically obtain cover?

## Decision

- The court held that Waterfront breached the contract by improperly refusing to honor CMA’s purchase option after CMA provided contract-compliant notice.
- The court granted CMA specific performance, ordering Waterfront to carry out the purchase-option sale (rather than requiring completion of return-and-resale before damages could be calculated).
- The court rejected Waterfront’s argument that the availability of cover and money damages made specific performance inappropriate on these facts.

## Legal Principles

- When a contract grants an end-of-term purchase option and the option holder satisfies the contract’s required procedure, the other party’s refusal to complete the sale is a breach.
- Under U.C.C. § 2-716, specific performance is not limited to cases involving one-of-a-kind goods; it may also be ordered in “other proper circumstances” when money damages are not an adequate substitute for performance.
- A court may treat damages as inadequate when a damages remedy would require extended, commercially inefficient steps (such as months of returns followed by resale transactions) before the parties can even quantify the loss.
- The fact that a buyer might obtain cover in the market does not automatically defeat specific performance if cover-and-damages would be an impractical way to resolve the dispute given the transaction’s scale and timing.

## Conclusion

CMA CGM, S.A. v. Waterfront Container Leasing Co. treated Waterfront’s refusal to honor CMA’s end-of-lease purchase option as a breach and awarded specific performance under U.C.C. § 2-716, reasoning that forcing months of container returns and subsequent resales before calculating damages would not provide an adequate remedy compared to ordering the contract’s sale to be completed.


CMA CGM, S.A. v. Waterfront Container Leasing Co., 82 UCC Rep. Serv. 2d 259, 2013 WL 6576792 (2013)