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Contracts • Remedies for Unexcused Non-Performance
K#160
Legal Definition
Either:
(A): (Contract Price) - (Market Price at Time of Delivery)
or
(B): (Contract Price) - (Resale Price)
If the seller cannot resell the goods, then damages would be the contract price.
If the seller is a volume seller, then they may pursue provable lost profits from sale as damages.
(A): (Contract Price) - (Market Price at Time of Delivery)
or
(B): (Contract Price) - (Resale Price)
If the seller cannot resell the goods, then damages would be the contract price.
If the seller is a volume seller, then they may pursue provable lost profits from sale as damages.
Plain English Explanation
When a buyer breaches under the UCC and the seller hasn't delivered the goods, there are a couple of formulas to calculate the seller's damages:
(1) Contract Price - Market Price at Time of Delivery: This is used when the seller hasn’t resold the goods. The difference between what the contract promised and what the goods are worth at the time of delivery gives the seller their damages.
(2) Contract Price - Resale Price: If the seller manages to resell the goods, damages are the difference between the contract price and the resale price.
If the seller can't resell the goods at all, they can recover the contract price itself.
For volume sellers (sellers who sell goods in bulk or repeatedly), they might not just rely on these formulas. Instead, they can claim provable lost profits from the sale, since they would have made those profits if the deal hadn’t fallen through.
(1) Contract Price - Market Price at Time of Delivery: This is used when the seller hasn’t resold the goods. The difference between what the contract promised and what the goods are worth at the time of delivery gives the seller their damages.
(2) Contract Price - Resale Price: If the seller manages to resell the goods, damages are the difference between the contract price and the resale price.
If the seller can't resell the goods at all, they can recover the contract price itself.
For volume sellers (sellers who sell goods in bulk or repeatedly), they might not just rely on these formulas. Instead, they can claim provable lost profits from the sale, since they would have made those profits if the deal hadn’t fallen through.
Visual Aids
Related Concepts
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