Seller's Remedies

Question 2

What are the seller’s remedies where buyer has accepted the goods or assumed the risk of loss?

Answer 2

1. right to price
2. right to reclaim goods

Question 3

What is a seller’s right to price? section?

Answer 3

2-707. Seller may seek to recover full contract price (or reasonable price if not in contract), PLUS any incidental damages where the buyer has accepted goods and fails to pay OR where risk of loss has been passed to the buyer and the conforming goods are lost or damaged.

Question 4

What must a seller do to recover under right to price where buyer accepts goods and doesn’t pay? Section?

Answer 4

Seller may recover price only if the seller is unabel to sell the goods at a reasonable price after a reasonable effort or circusmtances indicate that such an effort will not yield a sale. 2-707(1)(b)

Question 5

When is a seller entitled to right to reclaim goods? section?

Answer 5

When an insolvent buyer receives goods on credit, and the seller learns that the buyer is insovlent, the seller may reclaim the goods, provided a demand is made within 10 days after the buyer’s receipt of the goods. 2-702(2).

Question 6

When does the ten day limitation on a seller’s right to reclaim goods not apply?

Answer 6

If the buyer has misrepresented solvency in writing within three months prior to delivery. Otherwise, the seller cannot base a right to reclaim goods on the buyer’s fraudulent or innocent misrepresentation of solvency or of intent to pay.

Question 7

What limitation on the seller’s right to reclaim goods is seen in 2-702(3)?

Answer 7

The right to reclaim is subordinate to the rights of a buyer in the course or other good-faith purchaser, and, if exercised, precluddes all other remedies with respect to the reclaimed goods.

Question 8

What rights does seller have for delivered goods to a buyer who pays with a check? Sections?

Answer 8

If the buyer pays with a check that is subsequently dishonored, then the seller may reclaim the goods following a demand made within a reasonable time. The seller’s right to reclaim is subejct to the right of a good-faith purchaser. 2-507 & 2-511

Question 9

What are the three alternative remedies available to a seller when there is a wrongful rejection? Section?

Answer 9

1. collect market damages
2. Resell the goods
3. Recover the price

All of these may also include any incidental damages.

2-703

Question 10

What is the market damages rule/measurement? Section?

Answer 10

Generally, seller can recover market damages from buyer: contract price of the goods – market price at the time and place of tender. 2-708(1).

Question 11

What is the lost profits provision? Section?

Answer 11

If the measure of market damages is inadequate to put the seller in as good a positoin as performance would have done, 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, due allowance for costs reasonably incurred, and due credit for payments or proceeds of resale. 2-708(2)

Question 12

What kind of goods are applicable to the lost profits provision?

Answer 12

Genearlly, the lost profit provision is only available for a seller if the goods are relatively homogenous and in relatively deep supply.

Question 13

What kind of sellers may benefit from the lost profit provision?

Answer 13

Lost volume seller

Question 14

Define lost volume seller

Answer 14

To qualify as a lost volume seller, the seller needs to show only that it could have supplied both the breaching purchaser and the resale purchaser with the goods.

Examples: new car dealerships; big box stores

Question 15

What is the formula for the lost profit provision?

Answer 15

Lost profits = list price – cost

Question 16

What is “cost” as used in the lost profits provision formula?

Answer 16

For dealers, cost is the seller’s price in purchasing the goods. For manufacturers, cost is the cost of manufacturing the goods.

Question 17

What are the seller’s options for reselling the goods? Section?

Answer 17

If the seller elects to resell and sue for the contract price minue the resale price, then the resale must be:
* only of goods identified in the contract; and
* commercially reasonable.

2-706(1)

Question 18

Does a seller have to provide notice when reselling goods? section?

Answer 18

If the seller wishes to resell the goods in a private sale, the seller must first give the buyer resaonable notice of his intent to resell. 2-706(3).

Question 19

What are a seller’s incidental damages? section?

Answer 19

Things like storage and shipping costs. 2-710.