DAMAGES PROVISIONS

KB: Whether you're a buyer or a seller you're looking at K price minus Market price (this is standard)
Posner says the party that can best bear the risk should bear it
Risk of harm should be on carrier only if it knows of the special circumstances
UCC 1-305 Damaged party may be put in as good a position as if contract fully performed
1. The remedies provided by this Act must be liberally administered to the end that the aggrieved party may
be put in as good a position as if the other party had fully performed
Injured Buyer:
UCC 2-713 Damages for non-delivery by seller are:
(Market Price)- (Contract Price)+(incidental damages)-(expenses saved).
Buyers Damages for Non-Delivery or Repudiation
1. Difference between MP at the time when the buyer learns of breach and the KP together with any incidentals
2. Market price is to be determined as of the place for tender or, in cases of rejection after arrival or
revocation of acceptance, as of the place of arrival.
UCC 2-712 If seller breaches, buyer may recover from seller (Cost to Cover)- (Contract Price)
1. After a breach within the preceding section the buyer may cover by making in good faith and without
unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due
from the seller
2. The buyer may recover from the seller as damages the difference between the cost to cover and the contract
price together with any incidental or consequential damages as hereinafter defined (Section 2-15), but less
expenses saved in consequence of the sellers breach
Injured Seller:
UCC 2-706 Sellers Resale Including Contract for Resale
Measuring damages by the difference between contract price and resale price (pursuant to 2-706)
If buyer breaches, seller can resell the goods and may recover (contract price)-(resale price)+(incidental damages)(expenses saved)
Aggrieved entitled to recover damages for the difference between the contract price and its resale price under 2706
After breach, the seller gets the difference between the resale price and the contract price, if the resale was done in
good faith and in a commercially reasonable manner
UCC 2-708 Sellers Damages for Non-acceptance or Repudiation (see Warner v. McLay)
708(1) If buyer breaches, seller can recover KP - MP
(unpaid contract price)-(market price)+(incidental damages)-(expenses saved);
708(2) If that is not as good as performance, then can recover profit seller would have made from full performance
then the measure of damages is the profit (including reasonable overhead) which the seller would have made from
full performance by the buyer, together with any incidental damages provided in this Article (2-710)
Sellers damages for non-acceptance = difference between market price at the time the seller learns of the breach
and the contract price, with adjustments for incidental costs; if the market price is lower than the expected profit,
the seller can sustain a claim for the lost profit
Buyer:
UCC 2-714 Buyers Damages for Breach in regard to Accepted Goods
Buyer can recover for any non-conformity of tender resulting from the seller's breach; the measure of damages for
breach of warranty is:
(Value of the goods if they had conformed) (Value of accepted goods at the time of acceptance) + (Incidental and
Consequential Damages)

UCC 2-715(2)(a) Buyers Consequential Damages (pg. 287) (think Hadley)

Bars a buyer from obtaining consequential damages that could have been prevented by cover or otherwise
Consequential damages resulting from the sellers breach include: losses resulting from requirements/needs of the
buyer that the seller at the time of contracting had reason to know and which could not be prevented by cover.
Lost profits test. Lost profits are recoverable provided that:
1. There is proof some loss occurred
2. The loss flowed directly from the agreement breached and was foreseeable
3. There is proof of a rational basis from which the amount can be inferred/approximated.
Lost Volume Seller
Restatement (Second) of Contracts 347, pg. 304
To claim lost volume seller status, the non-breaching party must show that it could and would have
entered into a subsequent agreement.
Recovering Lost Profits
Restatement of Contracts, 331, pg. 308
Lost profit damages from breach of contract are only recoverable to the extent that the evidence affords a
sufficient basis for estimating their amount in money with reasonable certainty. Where the evidence does
not afford a sufficient basis, damages may be measured by the rental value of the property.
Comment (d): Well-established businesses can often estimate their lost profits with reasonable certainty.
RESTITUTION
Restatement (Second) 371 Measure of Restitution Interest (pg. 366)
If money is awarded to protect a party's restitution interest, it may as justice requires be measured by either:
(a) the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it
from a person in the claimant's position, [cost of completion] or
(b) the extent to which the other party's property has been increased in value or his other interests advanced.
[market value]
Restatement (Second) 90: Promise Reasonably Inducing Action or Forbearance
1. A promise which the promisor should reasonably expect to induce action or forbearance on the part of the
promisee or a third person and which does induce such action or forbearance is binding if injustice can be
avoided only be enforcement of the promise. The remedy granted for breach may be limited as justice
requires.
Liquidated Damages: Restatement 339
An agreement, made in advance of breach, fixing the damages therefore, is not enforceable as a contract and does
not affect the damages recoverable for the breach, unless
A. the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach, and
B. the harm that is caused by the breach is one that is incapable or very difficult of accurate estimation
UCC 2-718(1)
Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable
in the light of
the anticipated or actual harm caused by the breach,
the difficulties of proof of loss, and
the inconvenience or non feasibility of otherwise obtaining an adequate remedy.
A term fixing unreasonably large liquidated damages is void as a penalty.
Specific Performance: UCC 2-716:
(1) Specific performance is decreed where goods are unique or in other proper circumstances.
(2) Decree may include terms/conditions as payment of the price, damages, or other relief as the court deems just.